What is Double BOTTOM? What are their conditions to determine the bullish trend?

[shalini]

Double bottom helps us to derive  demand supply position by following Dow theory.

conditions to determine bullish trend are

two equivalent bottoms

volume at the second bottom should be high

duration between the two bottoms should be 20 days

long position can be considered above previous high

[Johnson]

Graphically two consecutive bottoms are formed like W shape indicated reversal pattern from bearish to bullish trend.

Conditions for double bottom

A prior down trend

25 to 30 days between two bottom peaks

volume should be high in the second bottom

[M Prem Rajan]

A double bottom is formed by 2 significant equivalent lows, not necessarily equal between a duration of atleast 1 month interval. It signifies significant buying support at the zone and once the price moves above this level with high volume, we can keep the equivalent level as stop loss and take a bullish position.

[Balaji]

Double bottom: Two equivalent bottoms identified in the charts are called as double bottom.

Conditions to determine the bullish trend:

1. Identify 2 equivalent bottoms in the chart
2. Duration between the equivalent bottoms – Min 1 month
3. Volume should be high at second bottom or while crossing neck

[Ramanathan Chidambaram]

Identify equivalent Bottom.

Duration between them is minimum 1 month.

Volume should be high at second bottom or at least near the breakout neckline (in the upward trend)

[Author]

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