THE DOUBLE BOTTOM ADAM &EVE
Adam is a term that describes how the bottom looks, in this case, a narrow, pointed bottom, perhaps with a one-day downward spike. Eve bottoms are more rounded looking and wider.
If they have spikes, they tend to be more numerous and shorter. Many times the difference between Adam and Eve is the width of each over their entire height.
Adam bottoms tend to remain narrow but Eve bottoms widen over their height. When trying to decide which is which, ask yourself if the two bottoms appear different or similar. With Adam & Eve, the two should look different (the first narrow and the second wide).
The Adam & Eve double bottom is a chart pattern that performs best in a bear market. In a bull market, however, it's just an average performer. Before trading,
wait for price to close above the peak between the two bottoms, confirming the Adam & Eve double bottom as a valid chart pattern.
Price trend Downward leading to the pattern. Two distinct valleys that look different.
Adam bottoms appear first and are narrow, V-shaped, sometimes with one long price spike. Eve bottoms appear after Adam and are wide and more rounded looking.
Spikes that appear tend to be more numerous and shorter on Eve bottoms.
The rise between bottoms should measure at least 10%, but allow variations. Tall patterns perform better.
Bottom price - The price variation between bottoms is small. The two valleys should appear to bottom near the same price.
Separation - The twin valleys are several weeks apart with most falling in the 2 to 6 week range. Bottoms wider than 8 weeks apart and performance deteriorates.
The double bottom confirms as a true double bottom once price closes above the peak between the two valleys. Without confirmation you do not have an Adam & Eve double bottom, just squiggles on a chart.
Volume Usually higher on formation of the left valley.
The valley at the 0.618fibonacci retracement level moved price down. Only when price breakout of these valley that will give a signal to buy in. Same goes to the oscilator(STOCHASTIC RSI) fully oversold.
Technicals suggests that price has bounced back down on getting to the valley. A break out of the valley wikl bring price to a measured move up to 42usd.
BUY: $20( or at current price and hold)
SELL: $30, $35, $40.
STOP LOSS: $12
Disclaimer: This is for educational purposes,it is not intended as a financial advice.
The analyst won't be responsible for a loss of fund. Trader should be able to manage risk.