Page 15 - MFX Reversal Patterns C.M
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Double Bottom
Confirming a Double Bottom Chart Pattern
The double bottom pattern always follows a major or minor down trend in a
particular security, and signals the reversal and the beginning of a potential
uptrend.
Consequently, the pattern should be validated by market fundamentals for the
security itself, as well as the sector that the security belongs to, and the market in
general.
The fundamentals should reflect the characteristics of an upcoming reversal in
market conditions.
Also, volume should be closely monitored during the formation of the pattern.
A spike in volume typically occurs during the two upward price movements in the
pattern.
These spikes in volume are a strong indication of upward price pressure and serve
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as further confirmation of a successful double bottom pattern.
