(HEMP) Breakout From Double-Bottom Pattern Can L
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(HEMP) Breakout From Double-Bottom Pattern Can Lead To A Powerful Rally
One of the most common patterns is the cup-with-handle base, which features one major shakeout. But some leading stocks undergo two shakeouts to form what's called a double-bottom.
Cup with Handle and price Label Tags to outline the extreme High's and Low's on HEMP's Chart
http://stockcharts.com/h-sc/ui?s=HEMP&p=D...3115051440
Like the cup-with-handle, this pattern also can precede big gains after a successful breakout. The double-bottom base forms after a stock takes another turn south before completing the right side. It tends to look like a W, with the second leg down undercutting the first one.
But there are exceptions. In rare occasions, a breakout from a double bottom works even if the second low doesn't take out the first. The ideal buy point sits 0.10 above the middle peak, which should also be below the base's left peak.
Also, buy points tend to be within 15% of a prior high.
A handle may form as the stock builds the right side. In this case, the buy point would be 0.10 above the high of the handle, instead of the middle peak.
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