Double Bottom Pattern

Two failed attempts to go lower — and the neckline that confirms it

A double bottom is a bullish reversal pattern made of two lows at roughly the same price, separated by a clear rally. It completes when price closes above the neckline drawn through the high between the two lows.

Chart data

#	Open	High	Low	Close
1	100.13	100.21	99.31	99.54
2	99.47	99.64	98.79	99.04
3	99.18	99.57	98.12	98.37
4	98.55	98.78	97.27	97.71
5	97.65	98.65	95.77	96.04
6	96.06	97.74	90.47	91.16
7	91.15	91.32	90.47	90.67
8	90.58	92.65	90	92.25
9	92.29	94.51	91.6	94.24
10	94.25	97.18	93.71	96.5
11	96.63	98.13	96.48	97.58
12	97.88	98.11	97.05	97.4
13	97.55	97.77	96.63	96.85
14	96.86	97.44	95.17	95.54
15	95.47	95.64	95.18	95.31
16	95.22	95.4	94.62	94.7
17	94.62	94.91	93.93	94.01
18	94.14	94.65	91.31	91.63
19	91.39	93.27	91.19	92.88
20	92.69	94.24	92.25	93.74
21	93.73	95.57	93.14	95.31
22	95.31	96.68	94.83	96.33
23	96.35	98.4	95.92	97.9
24	97.42	97.85	96.5	96.65
25	96.35	100.38	96.09	98.9
26	98.61	104.13	98.34	101.9
27	102.09	104.17	101.28	103.85
28	103.56	105.54	103.13	105.02
29	105.2	106.5	105.02	106.3
30	106.39	108.85	105.72	108
31	107.94	110	107.51	109.57

At a glance

What timeframe does it work on?

As with its bearish mirror image, the double top, this pattern needs enough separation between the two lows to represent a genuine second failed attempt at new lows rather than ordinary noise. On daily and weekly charts the two lows typically span weeks to months. On short intraday timeframes, price revisits recent lows constantly, so a two-low shape there says much less about an actual change in trend.

Anatomy of the pattern

• Low 1 — The first low, formed at the end of an existing downtrend. On its own this is just a low — every downtrend eventually makes one.
• The rally — A recovery from Low 1 up to an intervening high. This high is what becomes the neckline, so it needs to be a clear, identifiable swing rather than a shallow bounce.
• Low 2 — A second low that approaches but fails to meaningfully undercut Low 1. This is the informative part: sellers tried again at the same level and could not extend the downtrend.
• The neckline — A horizontal (or near-horizontal) line through the high between the two lows. The pattern is not complete until price closes above it — before that, it is only two lows that happen to be similar depths.
• The measured move — The conventional target projects the vertical distance from the lows up to the neckline, applied upward from the breakout point.

How to identify it

1. A clear prior downtrend precedes the first low — there has to be a trend for this to reverse.
2. The second low forms at approximately the same price as the first, typically within about 2-3%. A slight undercut that quickly reverses is common and does not disqualify it.
3. The rally between the two lows is substantial, a clear swing high and not a minor bounce.
4. The high between the lows can be joined to form a plausible neckline.
5. Volume is often lighter at Low 2 than at Low 1 and tends to expand on the rally from Low 2 and on the neckline breakout, though this varies enough that its absence does not rule the pattern out.
6. Price closes above the neckline. Until this happens the formation is two lows, not a completed double bottom.

How to trade it

Entry. The standard entry is a close above the neckline. A more conservative variant waits for price to break the neckline and then retest it from above, giving a second entry closer to the breakout level with a tighter stop, at the cost of missing moves that never look back.

Stop. Below Low 2, with a little room rather than exactly at the low, where stop-runs are common. A decisive close below both lows removes the pattern's premise.

Target. Measure the distance from the lows up to the neckline and project that same distance above the breakout point. Check for prior resistance levels between the entry and the projected target — they frequently halt the advance before the measured move is reached.

What invalidates it

• The neckline never breaks. Two similar lows with price holding below the intervening high is not a completed pattern, whatever it may turn into later.
• The second low undercuts the first by a meaningful margin. Then the trend made a new low rather than failing, and the bullish reversal case disappears.
• There was no prior downtrend to reverse. A two-low shape inside a long sideways range is not a double bottom.
• Price closes back below the neckline shortly after breaking it. Failed breakouts from this pattern can reverse sharply, since the traders who bought the break are now trapped.

Often confused with

Double Bottom vs Cup and Handle: what's the difference?

A double bottom has two distinct lows, sharp or rounded, with a clear swing high between them. A cup and handle is one continuous rounded trough with no distinct second low, then a small pullback (the handle) near the rim; it usually continues an uptrend, while a double bottom ends a downtrend.

Double Bottom vs Double Top: what's the difference?

A double top is two highs at roughly the same price (an M), neckline through the low between them, completing on a close below that low. A double bottom is two lows (a W), neckline through the high between them, completing on a close above it. A top follows an uptrend; a bottom, a downtrend.

Double Bottom vs Inverse Head and Shoulders: what's the difference?

A double bottom has two troughs at about the same level with one peak between them. The inverse head and shoulders adds a third trough and a second rally high, and the deeper middle low is what defines it.

Double Bottom vs Triple Bottom: what's the difference?

A double bottom confirms after two lows and one rally high; a triple bottom needs a third test of support first. If the rally after the second low stalls near the first rally high without closing above it and price returns to the lows, a triple bottom may be forming.

Double Bottom vs Tweezer Bottom: what's the difference?

Both rest on two equal lows, but a double bottom separates them with a rally of many bars and confirms on a break above that rally's peak. A tweezer bottom's lows are on adjacent candles, and its trigger is the second candle's high.

How reliable is the double bottom pattern?

The double bottom is the bullish counterpart of the double top, and both are among the most extensively catalogued patterns in the technical analysis literature (see Bulkowski; Edwards and Magee). The same two caveats apply here as to the double top. How closely the two lows must match, and how strong the intervening rally must be, are judgment calls that shift which formations qualify. And a common mistake is buying two similar-looking lows before the neckline actually breaks; formations that never break the neckline are not double bottoms at all. Its genuine strength is an unambiguous completion trigger and a clearly defined invalidation level.

References

• Thomas N. Bulkowski. Encyclopedia of Chart Patterns . Wiley , 2005 . ISBN 978-0471668268.
• Robert D. Edwards, John Magee and W.H.C. Bassetti. Technical Analysis of Stock Trends . Routledge , 2018 . ISBN 978-1138069411.

Frequently asked questions