Double bottom
The double bottom pattern is the mirror image of the double top pattern. It has two swing lows at around the same price level. The swing high in between them forms a resistance line or the neckline. In a double bottom pattern, the first swing low marks the extreme low of the existing downwards trend.
When the second swing low fails to push below the previous low, it indicates that the bears are not interested in taking the prices lower. It is a warning that a reversal might occur.
Once the market breaks above the resistance level it confirms the bullish reversal. Look to buy on the breakout above the resistance line or on pullback to the previous resistance line which now acts as a support after the breakout.
The volume should increase as price breaks out of the resistance line. The stop loss can be placed below the low of the breakout candle.
To get the target objective, measure the height of the pattern from the swing low to the resistance and then project it to the breakout point.
