Definition
Double Bottom forms when price makes two lows at similar levels with a moderate rally between them. It signals that sellers couldn't push price lower on the second attempt. A break above the middle peak confirms the bullish reversal.
Formula
Price Target = Resistance + (Resistance - Support)
Example
Price bottoms at $30 twice with a rally to $35 between. A break above $35 targets $40 ($35 + $5). This W-shaped pattern often marks significant lows.
FAQ
What is Double Bottom?
A bullish reversal pattern with two troughs at approximately the same level.
How do you calculate Double Bottom?
A common formula for Double Bottom is: Price Target = Resistance + (Resistance - Support)
Why is Double Bottom important?
Double Bottom helps investors evaluate chart patterns and make more informed decisions.