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Technical analysis II

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13. Double bottom

A double bottom is the opposite of a double top and appears as a letter "W" on a chart.

The formation of a double bottom and the indicators of the reversal are much the same as for a double top, but the volume patterns are different. A true double bottom will show more volume on the second rally up than on the first rally.

If it's the other way round - low volume on the second rally - you may not be looking at a double top at all, but at a continuing downtrend.

A double bottom



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