Double bottom

A double bottom is a bullish reversal chart pattern that forms after a downtrend and resembles the letter “W.” It occurs when the price tests the same support level twice but fails to break lower, indicating that selling pressure is weakening and buyers are gaining control. The pattern is confirmed when the price breaks above the neckline (the resistance formed between the two bottoms) with strong trading volume, signaling a potential trend reversal. Traders often wait for a breakout and a successful retest of the neckline as new support before entering long positions to improve the probability of a successful trade.