The double bottom reversal pattern describes a setup where a stock hits a low twice within a downtrend, each followed by an increase of over 10%, before breaking through a resistance level and confirming it as new support. This signals the potential reversal of the downtrend, allowing traders to initiate a long position with the previous resistance level as the profit target. For a true double bottom, six specific criteria must be met including two bottoms, two increases, a resistance breakdown, and resistance turning to support.

1. Double Bottom Reversal
Pattern
TWO BOUNCES OFF THE BOTTOM COULD EQUAL PROFIT AT THE TOP

2. The Setup
 Make sure the stock is in a current downtrend

3. Pattern Details
 1st Bottom
 Increase
 2nd Bottom
 Increase from Bottom
 Resistance Breakdown
 Resistance Turned Support

4. 1st Bottom
 Stock hits a new low

5. Increase
 Retreat from the low 10% or more that turns back negative

6. 2nd Bottom
 Stock falls back to within 3% of previous low and hits support

7. Increase from Bottom
 A rise from the second bottom should include increased volume

8. Resistance Breakdown
 Stock must break previous resistance level and continue higher to complete
pattern

9. Resistance Turned Support
 When resistance becomes support and is confirmed it gives a chance to start a
long position

10. Now What?
 You can initiate a long position
 The distance from the bottom of the pattern to the break of resistance will
give you an exit price for the new position

11. Final Thoughts
 In order for a double-bottom pattern to exist, six factors must exist
 1st Bottom
 Increase
 2nd Bottom
 Increase from Bottom
 Resistance Breakdown
 Resistance Turned Support
 Stock must be in a downtrend
 After the pattern is complete, a long position can be started

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