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Double Bottoms

This chapter begins discussing chart patterns not bounded by trendlines. How can you find them if not looking for straight or diagonal trendlines? You find them by looking for two potholes that bottom near the same price.

KEY POINT:

A double bottom is a twin valley pattern with valleys that bottom near the same price. The double bottom acts as a bullish reversal of the downward price trend.

If I were to ask my brother to find a double bottom on a price chart, he might pick AB shown in Exhibit 12.1. Price from peak C forms a hill filled with moguls that my brother would love skiing down. At the bottom of that hill, the double ...

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