Technical Analysis of Double Bottoms Chart Patterns

How to Interpret Double Bottoms Chart Patterns

To learn how to analyze the stock indices trading market using double bottoms stock indices chart patterns a trader should first of all learn the technical analysis of double bottoms stock indices chart pattern explained in this tutorial.

Double Bottoms Stock Indices Chart Pattern

Double bottoms stock indices pattern is a reversal stock indices pattern which forms after an extended downward indices trend.

Double bottoms stock indices chart pattern is made up of two consecutive troughs which are roughly equal, with a moderate peak between the 2 troughs.

Double bottoms stock indices chart patterns formation is considered complete once stock indices trading price makes the second low and then penetrates the highest point between the lows, called the neckline.

The buy stock indices signal from this double bottoms market bottoming out stock indices signal occurs when the stock indices market breaks-out the neck line to the upside.

In Indices, the double bottom stock indices pattern is an early warning stock indices signal that the bearish Indices trend is about to reverse.

Double Bottoms Chart Pattern is only considered complete/confirmed once the neckline is broken. In this double bottoms stock indices chart patterns formation the neckline is the resistance level for the indices trading price. Once this resistance is broken the stock indices trading market will move up.

Summary:

• Double bottom stock indices chart pattern forms after an extended move downward - indices trading downwards trend
• This Double bottoms stock indices chart pattern formation indicates that there will be a reversal in stock indices trading market
• We buy when stock indices price breaks out above neck-line: as described on the stock indices example explained below.

Technical Analysis of Double Bottom Patterns?

The double bottom stock indices pattern look like a W Shape stock indices chart pattern, the best reversal stock index signal is where second bottom is higher than the first bottom as illustrated & shown below.

This means that the reversal stock indices signal from the double bottom stock indices chart pattern can be confirmed by drawing an upwards indices trend line as shown below. If a trader opens a buy stock indices signal the stop loss will be placed just below this upwards trend line.

How to Interpret Double Bottoms Chart Patterns