Double bottom pattern, which is a bullish reversal pattern, which looks somewhat like the English letter W. The double bottom pattern is most commonly used in intraday trading and swing trading. The accuracy of the W pattern is around 70 to 75%, where once the stock or index forms the W pattern, it becomes easier to move up. Due to which bullish trend or rise is seen in the stock.
Let’s understand.

                                   

 

                 In the double bottom or W pattern, the stock starts going up after coming down from the top, taking support at the bottom level, but when it faces resistance at the top, it comes down from the same level, then again rises above the support that was the previous support. It goes up, and after facing a resistance near the above resistance. It breaks out of that resistance level and goes up. There is a rise in the stock, and as soon as there is a breakout, then buying starts in that stock.

             
When to buy and sell, and what should be the target and stop loss in stock using a double bottom pattern?

                  In a double bottom pattern, when the stock breaks the resistance level above the support for the second time and the stock rises after break out the resistance level, then should buy the stock. Our stop loss will be below the support level of that stock, and our target should be double 1-2% of the stock price. So that we can make a good profit.