What is double bottom pattern?

A double bottom is a chart pattern that is commonly used in technical analysis to identify potential buy signals. The pattern is formed when the price of a security reaches a low point, rallies to a certain level, then falls back to the same low point again, only to rally back again. This creates two "bottoms" at approximately the same price level.

The double bottom pattern is thought to be a bullish reversal pattern, as it indicates that the security's price may be reaching a support level and may be unable to break through to lower levels. When the price rallies back for the second time, it may signal that the downtrend has reversed and that the security is now in an uptrend.

It is important to note that the double bottom pattern is not a guarantee that the price of a security will rise. It is simply a pattern that may suggest a potential trend reversal and should be used in conjunction with other technical and fundamental analysis tools to confirm a buy signal. In addition, double bottoms can be subject to interpretation and may be influenced by the biases and expectations of the analyst. As a result, different analysts may come to different conclusions about the same data.