Double bottom

A formation of three points rather than two. Price falls to a level and turns up, rallies to an interim high, falls again to approximately the same level, and turns up a second time. The line drawn horizontally through the interim high is called the neckline, and the shape is conventionally written as a W.

The neckline is what separates the pattern from two lows that merely happen to be near each other. Until a close occurs above it, the structure is a range with two touches of its floor, and ranges of that description form constantly. Practitioners disagree about the rest: how close the two lows must be to count as equal, whether the second may undercut the first, and how much time should separate them. Wider tolerances find more patterns and more of them fail, narrower tolerances find fewer, and no threshold is authoritative.

A measured move convention accompanies the pattern, projecting the depth from the lows to the neckline upward from the neckline as a notional objective. It is a drawing convention and carries no guarantee of anything. The mirror image, two highs separated by a dip, is the double top.