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Double Bottom

Double Bottom- Full ExplanationA Double Bottom is considered a bullish signal, indicating a possible reversal of the current downtrend to a new uptrend. Sometimes called an "W" formation because of the pattern it creates on the chart, the Double Bottom is one of the most frequently seen and common of the patterns. The Double Bottom is a reversal pattern of an downtrend trend in a financial instrument's price. The Double Bottom marks an downtrend in the process of becoming a uptrend. A Double Bottom consists of two well-defined, sharp bottoms at approximately the same price level. The two bottoms are distinct and sharp . The pattern is complete when prices rise above the highest high in the formation. The highest high is called the "confirmation point". The bullish momentum may be evidenced through a higher bottom on an oscillator like RSI . Though not required, the market may break below the first low, even if briefly. A slight and temporary break below the first bottom is preferred as it may excite the bears only to reverse and trend higher. The neckline is formed between the price low of the valley between the two bottoms. A break above this neckline will confirm the double bottom pattern. The bullish confirmation is specified by a break in the key price resistance level (neckline) situated at the high point between the ‘bottoms’. Important Characteristics Following are important characteristics for a Double Top . Downtrend Preceding Double Top The Double Bottom is a reversal formation. It begins with prices in an downtrend. The trend downwards should be fairly long and healthy. Time between Bottoms Generally, the longer the time between the two bottoms, the more important the pattern is as a good reversal signal. Volume Volume tends to be heaviest during the first bottom and lighter on the second. It is common to see volume pick up again at the time of breakout. Pullback after Breakout A pullback after the breakout is usual for a Double Bottom. The higher the volume on the breakout, the higher the likelihood is for a pullback. Two Peaks at Different Levels Sometimes the two comprising a Double Bottom are not at exactly the same price level. This does not necessarily render the pattern invalid. Trading with Double Top: There are certain rules when trading with Double Bottom chart patterns. Firstly one should see the market phase whether it is up or down. As the double bottom is formed at the end of a downtrend , the prior trend should be an downtrend. Traders should spot if two rounding bottoms are forming and also note the size of the bottoms. Traders should only enter the long position when the price break out from the resistance level or the neckline. Example: From the below example of the 15 Min chart of BANKNIFTY we can see how bullish reversal takes places after the formation of the double bottom Stop Loss & Target : In the case of a Double Bottom chart pattern, the stop loss should be placed at the second bottom of the pattern and can be trailed at the pullback low as price moves higher but this will be a bit aggressive. The price target should be equal to the distance between the neckline and the bottoms. The False Break: How to trade the Double Bottom Pattern and profit from “trapped” traders Now… When you trade the Double Bottom, you must pay attention to the time and space between the lows — the larger the “gap”, the better. Why? Because when the lows are far apart, it gets the attention of more traders who could push the price higher. And with this concept, you can use it to profit from “trapped” traders. Here’s how… The first and second lows should have time and space between them Let the price break below the first low Wait for a rejection of lower prices and then go long The idea is simple. As the price breaks below the first low, bearish traders will short the markets and have their stops above the lows. But if the price quickly reverses higher, the short traders are “trapped”. And you can take advantage of it by going long, anticipating if the price moves higher, it’ll trigger their stops and push the market in your favor. Hope you all learnt from this post. Share with the community if you liked it. Regards Omahto
NSE:BANKNIFTYEducation
by Omahto
17
ITC CAN MAKE A RUN FOR 2501.ITC has given a breakout of it's parallel channel. 2.Double bottom breakout confirmed. 3.Howering above 200 ma. 4.RSI is bullish. 5.Above 33.2% fib level. Buy above - 229 Targets mentioned in the chart above. Please LIKE, COMMENT and SHARE to motivate and support me. I'll keep on posting new ideas on Indices & Stocks. Be sure to follow so that you don't miss any good trades that might have been rewarding. Any comments and critiques will be appreciated even if it's of opposite view as a trader can also be right so many times.
NSE:ITCLong
by this_is_shoaib
2
Balajitele - Range Bound - Range BreakoutNSE:BALAJITELE BalajiTele View : Bullish Shortterm - Medium Term - Long term Structure : Range Bround Range Breakout: Traders can enter in the direction of a breakout from a trading range. To confirm the move is valid, Traders can use other indicators as per thier own wish. Observation: 1. Range Breakout @ 75.00 2. Double / Multiple Bottom 3. Multiple support between 57 -58 indicates Balajitele can break the Upper range. 4. Range broken at 75.00 CMP 77.00 (7th February 12.40) View: Buy between 75 - 78 Stop Loss: 69.75 for long term Target 83 - 89 - 92 - 96 - 95 - 100 + + + +
NSE:BALAJITELELong
by FalgunPrajapatiTrading
Only for study purpose ... Price was making a lower low from last weeks but finally, price one last low brokes out with a strong green candle also on daily time frame. Some reasons for taking the trade : 1. Price-making historic pattern means breaking out of the last lower low with a strong green candle. 2. Morning star is there with engulfing candle and also hammer which is known as rejection candle. 3. There is also a neckline breakout of the Double bottom. 4. Price rejected two times .618 level of Fibonacci retracement. (In pink line) SL and TGT's are as shown in the chart.
NSE:ITCLong
by pakharsangave
Bitcoin HazardThis looks a bit scary on the technical basis as you can clearly see an Double Bottom Pattern and that also on a Monthly timeframe so. Moreover you can see The Hilega Milega Indicator is also very bearish as its showing a bearish divergence which is really scary. It is slightly tense to look at the chart of BTC. However we have to see whether the price will follow its history or the Whales will beat the price action and take it to 1 million dollars till 2030 as per the ARK Survey.
BITSTAMP:BTCUSDShort
by vashishthviraaj
Nifty 27Jan'22: Possible Double Bottom on the intraday charts Another negative close from the Nifty benchmark index today – losing 173 points to post a close at 17,110. The day's loss could have been worse, but thanks to the banking and financial stocks, especially the public sector ones, which led to a phenomenal upward momentum leading to a decent bounce back for the Nifty index from its intraday low of 16,862. The underlying short-term trend of the index is down, and its the intermediate trend which is now vulnerable for a reversal. Many sectors like IT, Pharma and Media have already turned down on its intermediate timeframe and can be looked at as shorting opportunities. We have an early sign of a double bottom reversal pattern on the intraday charts of benchmark Nifty, and so this can lead to some bounce back, if at all, in the following few training sessions. However, that does not mean that strategically one should go aggressively bullish; on the other hand, one should be extra careful as the degree of underlying volatility is still exceptionally high. Thank you for following my work and please feel free to share your thoughts and suggestions.         Trade Well. Trade Wise. 
NSE:NIFTY1!
by Abhijit_Paul