WHAT IS A Rising Bottom
Rising bottom is a pattern on a security's chart that results from the daily low price rising over time, creating a series of ascending troughs.
BREAKING DOWN Rising Bottom
A rising bottom pattern is considered to be a bullish signal, and indicates increasing basic support levels and ascending tops. Bullish refers to an indicator that prices are likely to rise. Technical traders use this pattern to confirm that the trend of the underlying security is heading upward. Technicians and economists regard a rising bottom as a sign of market strength.
Rising bottom relates to an ascending triangle, which is characterized by a horizontal top and rising bottom, and is created when a bullish market pushes up against a resistance level. An ascending triangle shows the pressure areas in a stock chart where the resistance tries to block a rising price, but the underlying bullishness of the market pushes the price slowly with some swing ups and swing downs, which form a pattern that looks like a triangle.
Other Types of Charting Patterns
Other types of patterns that can be observed from charting a security include ascending top, descending top, falling top and double bottom.
An ascending top pattern includes series of peaks with each peak higher than the previous one on the stock's chart pattern. Ascending tops are created following a previous and subsequent trough. This pattern may look like a mountain range in which each mountain top is higher than the last.
Descending top is a chart pattern where each peak in price is lower than the previous peak in price. This pattern signals a bearish trend in the security. A bearish trend in financial markets is defined as an overall downward trend in the prices of an industry's stocks or the overall fall in broad market indices.
A falling top chart pattern depicts the decline of a security or index value over time, with lower and lower resistance levels. This pattern is generally considered to be a bearish signal.
A double bottom pattern describes a change in trend and a momentum reversal from prior leading price action. This chart pattern depicts a drop of a stock or index, a rebound, another drop to the same or similar level as the original drop, and finally another rebound. The double bottom looks like the letter "W".