The Double Bottom pattern is a classic reversal formation that signals a potential trend change from bearish to bullish. It occurs after a prolonged downtrend when price forms two distinct lows at a similar level, indicating strong support.
How to Identify:
✔️ Two Lows: Price touches the same support level twice, forming a "W" shape.
✔️ Resistance Breakout: The neckline (resistance level) marks the breakout zone.
✔️ Trend Reversal Confirmation: Once price breaks above resistance, momentum shifts bullish.
Interpretation:
In this chart, we see a clear bearish trend, followed by two attempts to break below the same support level.
After failing to break lower, buyers regained strength, pushing price above resistance, confirming the bullish reversal.
Once resistance turns into support, traders often enter long positions, targeting higher levels.
What’s Next?
A sustained breakout could fuel further upside momentum. However, watch for potential false breakouts and retracements back to support before continuation.
How to Identify:
✔️ Two Lows: Price touches the same support level twice, forming a "W" shape.
✔️ Resistance Breakout: The neckline (resistance level) marks the breakout zone.
✔️ Trend Reversal Confirmation: Once price breaks above resistance, momentum shifts bullish.
Interpretation:
In this chart, we see a clear bearish trend, followed by two attempts to break below the same support level.
After failing to break lower, buyers regained strength, pushing price above resistance, confirming the bullish reversal.
Once resistance turns into support, traders often enter long positions, targeting higher levels.
What’s Next?
A sustained breakout could fuel further upside momentum. However, watch for potential false breakouts and retracements back to support before continuation.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.