Option Investor
Glossary

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

Double Bottoms

A double bottom is a reversal pattern that forms a bottom on high volume followed by a rally of at least 15 percent, subsequently followed by a second bottom within three percent of the first on lower volume. Bottoms should be at least one month apart, and the reversal is confirmed when a second rally crosses the peak of the first. A double bottom is also sometimes referred to as a "W" pattern, since it resembles a W on a chart. A double bottom is rather strict in its formation and requires definitive support and resistance levels.