Trading term

What is Double bottom?

A double bottom is a bullish reversal pattern that forms after a downtrend: price falls to a low, bounces, then falls to roughly the same low a second time and holds. The two troughs look like a 'W'. A close above the bounce high between them (the neckline) confirms the reversal up.

A double bottom is the mirror of a double top. Price drops to a low, bounces to a resistance level (the neckline), falls back to about the same low — and holds there, refusing to make a new low. That second defence of the same support shows sellers are exhausted and buyers are stepping in. The shape traces a clear 'W'.

Confirmation comes when price closes above the neckline — the high of the bounce between the two troughs. That break is the trigger and often the entry; before it, the two lows are just a pause, and price can still break lower. The target projects the height of the pattern (trough to neckline) upward from the break. As always, a breakout on strong volume is more trustworthy.

A double bottom (W) reversal
NecklineBottom 1Bottom 2Neckline break ↑

Two troughs at roughly the same level — sellers twice fail at the same support — under a neckline. The reversal up confirms only when price closes above that neckline.

For example

A stock falls to $40, bounces to $46, drops back to $40.5 (roughly the same low), then turns up. When it closes above the $46 neckline, the double bottom confirms, projecting a move toward about $52 ($46−$40 = $6, above $46).

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Why it matters to you

A double bottom is one of the most recognisable 'the selling is done' signals, because it shows sellers failing to make a new low twice — a clear exhaustion. It gives buyers a defined trigger (the neckline break), a measured target, and a clear invalidation (a new low below the troughs) to trade against.

⚠ Wait for the neckline break

Buying the second low, betting the double bottom will hold, is the common trap — plenty of 'double bottoms' break to new lows instead. The pattern is only confirmed when price closes above the neckline. Anticipating it before the break is guessing, not trading the pattern.

Frequently asked questions

Is a double bottom bullish or bearish?

A double bottom is bullish — it forms at the end of a downtrend and signals a reversal up. Price twice fails to break below the same support, and a close above the neckline (the bounce high between the troughs) confirms the turn. Its mirror image, the double top, is bearish.

How do you confirm a double bottom?

Confirmation comes when price closes above the neckline — the high of the bounce between the two lows — ideally on rising volume. Before that break, the pattern isn't complete and price can still make a new low. A successful retest of the broken neckline as support adds confidence.

What is the price target for a double bottom?

Measure the height of the pattern — from the troughs up to the neckline — and project that distance upward from the neckline break. It's an estimate rather than a guarantee, so traders usually combine it with other resistance levels to manage the trade.

How do you tell a double bottom from a range?

A double bottom is a reversal at the end of a downtrend with two distinct troughs and a confirming neckline break; a range is ongoing sideways chop between support and resistance. The key difference is context (a prior downtrend) and the decisive break above the neckline that ends the pattern.

Related terms

Ascending triangleAn ascending triangle is a bullish continuation pattern: a flat horizontal resistance line on top, with a rising trendline of higher lows beneath it. As the higher lows squeeze price against the ceiling, pressure builds — and it usually resolves with a breakout up through the resistance.ATR (Average True Range)ATR (Average True Range) measures how much a security typically moves in a period — its volatility — as an average of recent trading ranges. It doesn't say which direction price is heading, only how far it tends to travel, which makes it a core tool for stop-losses and position size.Bollinger BandsBollinger Bands wrap a price chart in three lines: a middle moving average with an upper and lower band set two standard deviations away. The bands widen when volatility rises and squeeze together when it falls, framing whether price is relatively high or low.BreakdownA breakdown is when price falls decisively through a support level it had been holding above — the bearish mirror of a breakout. It signals sellers have overwhelmed the buyers defending support, and often triggers a fast move lower as stops and new sellers pile in.
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