Bottoms Chart Patterns

Double bottoms or triple bottoms are well-known stock chart patterns. They’re often called reversal patterns. They finish one trend and start a new trend in the opposite direction.

You can find info about them in any basic book about technical analysis. But even so I think this is a simple but powerful chart pattern.

To identify bottoms, you need to see these two signals:

1. price made two or more almost similar bottoms
2. price retraced back more then 80% after each low

Trading rules

Recommended trading rules say to wait for a breakout of a horizontal resistance level of this stock chart pattern. Then, it enters a long trade, and you can expect a new rising trend to develop.

The stop-loss level should be below the resistance level.

You can see this strategy was really successful in the BIIB case

! My double bottom stock trading tip !

You can wait to be sure that a breakout from this type of stock chart pattern was successful.

Wait for a pullback to the former resistance level to act now as a new support level and buy it immediately when it bounces from this

horizontal support level

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