A-Eye sayeth
Looking at the chart you provided, let's analyze whether the
pattern in question can be considered a double bottom:
Close Proximity: The two low points on the chart are indeed
close to each other in terms of price level. While they may not be
exactly the same, technical analysis often allows for a degree of
variation.
Volume: The volume indicator below the chart shows
significant trading activity around the lows, which is typical in
double bottom formations as it indicates strong support at those
levels.
Structure: For a double bottom to be confirmed, the price
needs to break above the intermediate high between the two lows. It
appears that there is some upward movement after the second low,
which supports the potential for this pattern.
Weak Bottom vs. Double Bottom:
Weak Bottom: In futures trading, the term "weak bottom"
suggests that the price level may not hold and could be revisited
due to the lack of strong buying pressure or a significant excess
indicating a firm reversal.
Double Bottom: Even if the two bottoms are not exactly at the
same price level, as long as they are relatively close and the
intermediate high is breached, the pattern can still be valid.
Conclusion:
In this chart, the lows are close enough to be considered a
potential double bottom, especially if subsequent price action
confirms the reversal by moving above the intermediate high.
However, if the pattern lacks strong excess or fails to break the
intermediate high decisively, it might be viewed as a weak
bottom,
Newsletter
Subscribe to our email list for regular free market updates
as well as a chance to get coupons!
A-Eye sayeth Looking at the chart
I am wondering if this double bottom was a quant ...
Posted by steveo on 26th of Jul 2024 at 11:54 am
A-Eye sayeth
Looking at the chart you provided, let's analyze whether the pattern in question can be considered a double bottom:
Close Proximity: The two low points on the chart are indeed close to each other in terms of price level. While they may not be exactly the same, technical analysis often allows for a degree of variation.
Volume: The volume indicator below the chart shows significant trading activity around the lows, which is typical in double bottom formations as it indicates strong support at those levels.
Structure: For a double bottom to be confirmed, the price needs to break above the intermediate high between the two lows. It appears that there is some upward movement after the second low, which supports the potential for this pattern.
Weak Bottom vs. Double Bottom:
Weak Bottom: In futures trading, the term "weak bottom" suggests that the price level may not hold and could be revisited due to the lack of strong buying pressure or a significant excess indicating a firm reversal.
Double Bottom: Even if the two bottoms are not exactly at the same price level, as long as they are relatively close and the intermediate high is breached, the pattern can still be valid.
Conclusion:
In this chart, the lows are close enough to be considered a potential double bottom, especially if subsequent price action confirms the reversal by moving above the intermediate high. However, if the pattern lacks strong excess or fails to break the intermediate high decisively, it might be viewed as a weak bottom,