The Double Bottom is a bullish chart pattern in the shape of a “W”. The price successively makes two troughs (lower) at approximately the same level, indicating significant support. This chart pattern shows investor’s desire not to let the price reach new lows, and their desire to reverse the current trend.
The goal of a double bottom figure is calculated by plotting the height of the figure above the neck line.
When validating these patterns, it is common for the course to pullback on the neck line before reaching the objective of the figure.
Notes and Statistics: #
- In 70% of the cases, the movement is bullish after a double bottom.
- In 67% of the cases, the goal of the double bottom figure is achieved when the neck line is broken.
- In 97% of the cases, the bullish movement continues at the break of the neck line of the double bottom figure.
- In 59% of the cases, after exit, the price performs a support pullback on the neck line of the figure in Double Bottom.