A reversal pattern whereby a bottom is formed on high volume, followed by a rally of at least fifteen percent, subsequently followed by a second bottom (within three percent of the first) on lower volume. Bottoms should be at least a month apart, and the reversal is confirmed when second rally crosses the peak of the first rally.

This double bottom occurred for MCI Worldcom, Inc. between August and October of 1998. This example meets all of the technical requirements for a double bottom, including a rally of at least fifteen percent between the two bottoms, high volume (including the three highest volume days in the duration of the chart), and a second bottom at least a month after the first within three percent in terms of price. After the price penetrated the first peak, the stock started a major uptrend, and is nearly $80 as of January, 1999.

IQC Zone, a proprietary indicator found only in IQ Chart might have confirmed the breakout of the double-bottom, as it turned from red to blue on October 16th. Stochastics were also rising at the time, with %K recently crossing over %D.

You can choose up to four indicators at a time, such as IQC Zone, volume and stochastics, to display above the chart, by clicking on "Indicators" within IQ Chart. By using the "Pointer" in IQ Chart, you can isolate a specific period, and the price and technical information from that period will be displayed on the bottom of the screen. All drawing and pointing function in IQ Chart 3.1 are performed by clicking "Toolbox".

Go to next chart pattern