Double bottom

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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. The pattern looks like the letter W. In technical analysis, this pattern is considered a positive for the stock. The stock has bottomed out and the technical analysts would expect the stock to appreciate afterwards.

Double Bottom

In technical analysis, a situation in which the price of a security hits a low, rises 10-20%, and then hits roughly the same low before rising again. A double bottom in a relatively short period of time indicates that the low is a price support for the security. A situation where trading volume rises as the security increases from the second bottom is thought to be a bullish indicator. See also: W-shaped recovery.

double bottom

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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.

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.

References in periodicals archive ?
30 subsequent to a breakout of the double bottom would signal a failure and therefore an exit signal, while a drop below it first, means that no entry signal was ever received.
Currently in Poland and in other countries, the codes and regulations require that all new storage tanks must have double bottoms and working tanks have to be modernized by adding the second bottom.
Access to the hatch to the double bottom was in the engine room.
I also don't recall if our position paper actually conditioned abandonment of the double bottom goal on achieving SBT.
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The Tadawul All-Share Index (TASI) dived in the south earlier yesterday, reflecting the double bottom or a W-shape movement crossed the breakeven line to close in the green at 6,769.
Ponsi: double bottom in US dollar, if we can break above 76, we could see a nice relief rally
The State of California has created an investment fund of $500 million for double bottom line investing; both appropriate financial returns and social/environmental returns are required.
Eguino hid four plastic bags of cocaine in a suitcase with a double bottom, police said, but customs officials became suspicious over its thickness and found the cocaine through X-ray examination.
The Tadawul All-Share Index (TASI) opened with a negative note on its first trading day of the new week, spending entire session in the red territory and reflecting the double bottom yesterday.