Definition
A double bottom is a bullish reversal pattern that appears after a downtrend. Price falls to a low, rebounds to an interim peak, falls again to roughly the same low, and then rallies. The two troughs and the peak between them trace a shape resembling the letter "W."
The pattern shows that sellers tried twice to push price lower and failed both times at a similar level. That level acts as a floor — a zone of support where buyers consistently step in. When price finally rises above the interim peak, the pattern is considered complete and a reversal of the downtrend is signaled.
Why it matters
How it works
The first trough forms when a decline runs out of momentum and buyers absorb the selling. The rebound to the interim peak is checked by remaining sellers, sending price back down. The second trough is the crucial test: if buyers defend the same level again, it confirms that support is genuine and selling pressure has weakened.
Confirmation requires a breakout above the interim peak — often called the neckline of the pattern — preferably on rising volume. The projected target is the height of the pattern, measured from the troughs to the peak, added above the breakout. Until that breakout occurs, the formation is only a candidate double bottom.