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Double Bottom

A Double Bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. It describes the drop of a stock or index, a rebound, a drop to the same or similar level as the original drop, and finally another rebound. The double bottom looks like the letter "W". The twice-touched low is considered a support level. \/\/ Double bottoms trade well in conjunction with momentum indicators, such as Stochastics. Stochastics is a fixed parameter index. It has rigid confines at +100 and -100. Since Double Bottoms occur primarily in areas of consolidation, you can use a momentum indicator such as with a Stochastics reading of -25, at which point Stochastics are indicating "oversold."


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Saturday, 14 December 2024

Derivative transactions, including futures, are complex and carry a high degree of risk. They are intended for sophisticated investors and are not suitable for everyone. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results, and all of which can adversely affect actual trading results. For more information, see the Risk Disclosure Statement for Futures and Options.