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Tagged: Double Bottom
What is Double BOTTOM? What are their conditions to determine the bullish trend?
When the daily price is plotted with line charts, there should be two visible equivalent bottoms with the duration of 1 month timeline with high volume in second bottom.
Condition for bullish: Two equivalent bottoms with 1 month duration & high volume at the second bottom or the neck line and trend goes up above the neck line.
When a chart is plotted with the data and if we found there are two bottoms formed which are very much similar we can say a double bottom is formed, it will look like a Letter “W”.
The twice touched low is considered as a support level. If the stock moves up again after touching the low which was previously formed then we can considered the trend is bullish.
Double bottom conditions:
Two equalant bottoms
Volume should be higher after the second bottom or at the breakout
Duration is 20 days to 1 month
long positions can be created when it exceeds the previous high.
double bottom is when we make 2 equivalent bottoms in the shape of “w”. volume should be higher on second bottom. duration between one bottom and the second one should be 1 mth. we should create a long position if the price crosses the neckline.
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