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V.14:9 (372): Novice Trader's Notebook
V.14:9 (372): Novice Trader's Notebook
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The Double Bottom
Downtrends often end with a process of building a base on the chart. This pictorial display represents a shift from negative fundamentals and pessimistic investor sentiment, driving prices down, to the news turning positive, encouraging traders and investors to become net buyers. Typically, this process takes time, and market participants are dealing with conflicting news that leads to a market trading in a sideways fashion. But as the news turns more positive, the change in the fundamentals creates a new uptrend. One technical base or bottom chart pattern that distinguishes this process is the double bottom.
Downtrends often end with a process of building a base on the chart. This pictorial display represents a shift from negative fundamentals and pessimistic investor sentiment, driving prices down, to the news turning positive, encouraging traders and investors to become net buyers. Typically, this process takes time, and market participants are dealing with conflicting news that leads to a market trading in a sideways fashion. But as the news turns more positive, the change in the fundamentals creates a new uptrend. One technical base or bottom chart pattern that distinguishes this process is the double bottom.
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