Double Bottom Pattern

A double bottom is a bullish reversal candlestick pattern that forms after an extended downtrend and signals a potential trend reversal to the upside — the mirror image of the double top. The pattern consists of two consecutive price troughs at approximately the same level — with a moderate rally (the neckline) between them — creating a shape resembling the letter W on the price chart. The first trough forms as the downtrend finds support, the price rallies to the neckline, then falls again to test the same support level forming the second trough (confirming that buyers are defending that level). The pattern is confirmed when the price closes above the neckline — this neckline breakout is the entry signal for long positions. The measured move price target is calculated by adding the height of the pattern (distance from the bottoms to the neckline) to the neckline breakout level. In Indian equity markets, double bottoms are highly reliable bullish reversal patterns after significant corrections in Nifty 50, Bank Nifty, or individual stocks — particularly when they form at major support levels such as 52-week lows, Fibonacci retracement levels, or prior consolidation zones. Increasing volume on the second bottom's recovery rally and a high-volume neckline breakout significantly enhance the pattern's predictive reliability as a trend reversal signal.