The double bottom candlestick pattern is really the exact inverse of the double top pattern. It forms after strong bearish moves and has a ‘W’ type shape to it.
A double bottom signals bearish exhaustion and is formed when the bulls start to take control at a specific support level.
The bears drive prices down into this support level where the bulls step in and drive prices back higher, this bullish rejection of support creates the first ‘V’ shape trough.
The market finds resistance and the bears attempt to drive prices back down. When the market reaches the support level for a second time the bulls step back in again, driving prices higher creating another ‘V’ rejection shape trough.
This final move completes the double bottom candlestick pattern.
The resistance found after the first trough is referenced as the ‘neck line’. When prices push higher through the neckline, the double bottom pattern is completed and triggered.
A double bottom signals bearish exhaustion and is formed when the bulls start to take control at a specific support level.
The bears drive prices down into this support level where the bulls step in and drive prices back higher, this bullish rejection of support creates the first ‘V’ shape trough.
The market finds resistance and the bears attempt to drive prices back down. When the market reaches the support level for a second time the bulls step back in again, driving prices higher creating another ‘V’ rejection shape trough.
This final move completes the double bottom candlestick pattern.
The resistance found after the first trough is referenced as the ‘neck line’. When prices push higher through the neckline, the double bottom pattern is completed and triggered.
