Double bottom(redirected from Double Bottoms)
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Double bottom is a term that technical analysts use to describe a stock price pattern that, when depicted on a chart, shows two drops to the same dollar amount separated by a rebound.
For example, if a stock that had been trading at about $28 a share dropped to $18, rebounded to trade at about $22 for several weeks, and then dropped to $18 again, analysts would identify $18 as a double bottom.
An analyst observing this pattern might conclude that investors were comfortable paying $18 for the stock, and that the price might not drop below that level in the near term. In technical terms, the analyst would say that there was support for the price. However, there's no guarantee that it might not drop further and hit a new low.