Double Bottom

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DEFINITION of '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.

Double Bottom

INVESTOPEDIA EXPLAINS 'Double Bottom'

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.

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    A double bottom is formed when price falls to a new low, retraces upward some distance, turns back to the downside and stops ... Read Full Answer >>
  3. What is a common price target when identifying a double bottom?

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  4. What does a double bottom tell a trader about the overall trend?

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  5. How effective are double bottoms in spotting a change in direction of the overall ...

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