double bottom

Double Bottom

A charting pattern used in technical analysis. It describes the drop of a stock (or index), a rebound, another drop to the same (or similar) level as the original drop, and finally another rebound.

Notes:

The double bottom looks like the letter "W." The twice touched low is considered a support level.

Most technical analysts believe that the advance off of the first bottom should be 10-20%. The second bottom should form within 3-4% of the previous low, and volume on the ensuing advance should increase.

See also: Bottom, Double Top, Jennifer Lopez

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Double bottom

A term used in technical analysis to refer to the drop of a stock's price, a rebound, and then a drop back to the same level as the original drop.

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double bottom In technical analysis, a chart formation indicating stock price recoverability over time. It is characterized by a drop in a stock's price to a low level, a recovery in price, and a second decline to the previous low price. If the stock price recovers a second time, the low price reached at the two bottoms becomes a level of support for the stock. It is a bearish sign if the stock subsequently falls through this level. Compare double top.

double bottom