The Double Bottom pattern is a widely recognized bullish reversal pattern that signals a potential shift from a downtrend to an uptrend. It consists of two consecutive lows (bottoms) at a similar price level, separated by a moderate peak. The key element of this pattern is the neckline , which acts as a resistance level. When the price breaks above the neckline , it confirms the pattern and indicates a potential uptrend .

This pattern forms when selling pressure weakens after a prolonged downtrend. The first bottom appears as a price decline followed by a rebound, the second bottom retests the same support level but fails to break lower, signaling strong buying interest . The pattern is confirmed when the price breaks the neckline with strong volume , indicating a trend reversal.

Traders use this pattern for long opportunities. The ideal entry point is the neckline breakout, with a stop-loss below the second bottom to avoid false breakouts. The target price is estimated by measuring the height of the pattern and projecting it upward from the neckline .