Ugly double bottom after a yearly low

What an ugly double bottom is

An ugly double bottom is defined as a first valley followed by a second, higher valley. That shape differs from a traditional double bottom, whose valleys sit at or near the same price.

The second bottom is required to stand inside a bottom-separation-band above the first, so the pair is a higher-valley structure rather than a matched one.

Where the search is allowed

The historical workflow searched the setup only under a bull-market-filter. It also required a yearly-low-first-bottom: the stock had to be making a new yearly low, and that yearly low had to be the first bottom of the higher-valley pair.

Bottoms were located as the lowest low inside a short window around each candidate. Until pattern-confirmation, the higher valley is not treated as a valid setup.

Confirmation and entry

The pattern becomes valid only at pattern-confirmation, when price closes above the top of the two-valley structure. The close filter is intended to skip one-day spikes.

After that close, the historical workflow used a next-day open buy or a buy stop just above the pattern top.

Stops, targets, and holding period

A stop just below the first bottom is the preferred protective placement. A stop below the second bottom is the tighter alternative.

The archive treats the deep first-bottom stop as a structural flaw that is still needed, because new-low stocks often make still lower lows. In the archive example, a stop under the second bottom would have been hit on a later dip.

A height-multiple-target was used as the measured exit, projecting a multiple of the pattern height above the pattern top or the buy price. Tall patterns are described as helpful, but they do not guarantee a trend change.

The same workflow presents the setup as better suited to longer holding periods than to tight short-term risk.