Double-Bottom

The double bottom looks like a “W”. In terms of price, the two bottoms are very close together. In terms of time, the greater the distance between the two bottoms the better. This would suggest that accumulation is taking place. The key to this chart pattern is not the bottoms, but actually the breakout over the top which separates the two bottoms (the peak of the “W”).

DOUBLE-BOTTOM

DOUBLE-BOTTOM

A breakout over this swing top will confirm the double-bottom and turn the trend to up. Adding the distance between the top and the last bottom to the top will give the trader a rough idea of the next target price.