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2016issue C078-9

An unconfirmed stock double bottom next to a confirmed index

A 2016 top-down case treats confirmation as the close above the intervening-peak. A fall 2015 index double-bottom had already cleared that test, while a similar weekly sketch on a U.S. women's apparel retailer had not.

  • A double-bottom stays a candidate until pattern-confirmation, which in this case is a close through the intervening-peak.
  • The fall 2015 index structure was treated as valid only after that close, not when the two lows and the peak between them first appeared.
  • A top-down-scan can surface a stock W-shape that looks like an already-confirmed index double-bottom and still be an unconfirmed-pattern.
  • A later daily decline into a low can show how a setup evolved, but it does not replace the confirmation close.
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Current trackDouble top and bottom68 readings

Confirmation as the test

In fall 2015 a broad market index printed two lows with a higher peak between them and was labeled a double-bottom. A double-bottom is a two-low reversal sketch with a peak between the troughs, and it remains a candidate until confirmation rules are met.

That index double-bottom was treated as valid only after the index closed above the intervening-peak, the highest high between the two lows. Pattern-confirmation is that close through the intervening-peak. In this case it is what turned the sketch into a valid chart signal.

A top-down scan of the list

The search sequence was a top-down-scan. It assessed general-market condition first, then a longer-term stock chart, then the daily scale.

Weekly review of nearly 550 names focused on a U.S. women's apparel retailer whose monthly chart had fallen from 31.25 in fall 2006 to below 1.00 by 2016.

The stock sketch stayed a hypothesis

On the weekly stock chart, two later lows with a bounce between them resembled a double-bottom. The structure had not confirmed because price had not closed above the intervening-peak between those lows. It remained an unconfirmed-pattern, a double-bottom lookalike that still lacks that close and therefore stays a hypothesis, not a signal.

The stock-level pair of lows was described as similar to the already-confirmed index double-bottom, though the two structures occurred at slightly different times.

Daily scale after the May 2015 peak

The daily chart showed a May 2015 peak followed by a decline into a later low. That scale was used to inspect how the setup evolved after the broader market and the longer-term stock chart had been reviewed.

Editorial note: the archive uses the daily chart to follow the unconfirmed weekly sketch. It does not treat the daily decline as a substitute for pattern-confirmation on the weekly stock chart.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
27 of 32 in the Double top and bottom track
201648-55 pp.Next on Double top and bottomConstructing a range-midpoint moving averageThe first stage builds a range-midpoint from the highest high and lowest low over a stated lookback, instead of using the close.
All readings on this track · 32 readings
  1. 1988Reaction length as a trend integrity test
  2. 1991Sold-out double bottoms as a three-gate inventory test
  3. 1991A breadth classifier for V-bottoms and W-bottoms
  4. 1991Precomputed price-ratio clusters and double-top tests
  5. 1992Bond turning points as a regime check on equity double tops and breakouts
  6. 1992Commodity-bond ratio as an equity regime overlay
  7. 1992Gold lead confirmation for commodity-index turns
  8. 1994Constructing the thousand-line advance-decline indicator
  9. 1995Evaluating zero-line patterns on a breadth-price oscillator
  10. 1996Constructing double tops from a resistance retest to a trough break
  11. 1996Four-stage double-bottom construction
  12. 1998Double-bottom confirmation and stop placement
  13. 2000Two-bar reversal construction
  14. 2001Constructing double tops from failed resistance retests
  15. 2002Eve-Eve double bottoms: width, confirmation, and overhead resistance
  16. 2002Constructing Eve-and-Eve and classic double bottoms
  17. 2003Eve-Adam double bottoms as a two-step classroom test
  18. 2003Shape contrast then breakout confirmation in Adam and Eve double bottoms
  19. 2003Reading cyclical bottoms inside secular bear regimes
  20. 2004A case study of the shark-attack Fibonacci retracement
  21. 2004Confirming index turns with envelopes, divergence, and breadth
  22. 2005A five-wave euro/dollar case and the support that still had to fail
  23. 2007Constructing commodity seasonal indexes for regime context
  24. 2009Constructing rounded and double-top short setups
  25. 2010Hourly pattern entries, exits, and abstention as one playbook
  26. 2016Ugly double bottom after a yearly low
  27. 2016An unconfirmed stock double bottom next to a confirmed index
  28. 2016Constructing a range-midpoint moving average
  29. 2017Evaluating whole-dollar delays on pattern breakouts
  30. 2018Volume-confirmed bottoms and breakouts with moving averages
  31. 2018Evaluating double bottoms with a locked stochastic confirmation
  32. 2019Forex pairs as relative value: yield spreads, support, and a double bottom
By fieldChart patterns222 readingsBy year201678 readings
All 68 readings tagged Double top and bottom
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1982Head and shoulders as a three-path completion test1984Gold swing chart: failed highs, wash-out, and a boxed pivot range1984Stock low clusters as a cycle baseline1988Reaction length as a trend integrity test1989Volume-confirmed reversal patterns, stops, and measured objectives