Is a Double Bottom Indices Trading Chart Pattern Bullish or Bearish?
A double bottom stock indexes chart pattern has a W shape and it occurs at a market bottom hence its name double bottom stock indexes chart pattern and it signals a bullish stock indexes price reversal in the stock indexes trading market.
Once a double bottom stock indexes chart pattern is confirmed then the stock indexes trading market will be considered to be bullish, therefore a double bottom is bullish.
Double Bottoms Indices Trading Chart Pattern
Double bottoms stock indexes chart pattern is a reversal indices trading pattern that forms after an extended downward indices trend. Double bottoms stock indexes chart pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak in between.
This double bottoms stock indexes chart pattern formation is considered complete once stock indexes price makes the second low and then penetrates the highest point between the lows, called the neckline. The buy indication from this bottoming out signal occurs when the stock indexes trading market breaks the neckline to the upside.
In Indices, this double bottoms stock indexes chart pattern formation is an early warning signal that the bearish Indices trend is about to reverse. It is only considered complete/confirmed once the neckline is broken. In this double bottoms stock indexes chart pattern formation the neckline is the resistance level for the indices price. Once this resistance is broken the stock indexes trading market will move up.
Summary:
- Double bottoms stock indexes chart pattern forms after an extended move downwards
- This Double bottoms stock indexes chart pattern formation indicates that there will be a reversal in the stock indexes trading market
- We buy when stock indexes price breaks above the neckline; see below for explanation.
Is a Double Bottom Indices Trading Chart Pattern Bullish or Bearish?
