Bottom (technical analysis)
Encyclopedia
A bottom is an event in technical analysis
, where prices reach a low, then a lower low, and then a higher low.
The first low signifies the pressure from sell
ing was greater than the pressure from buy
ing. The second lower low suggests that selling still had more pressure than the buying. The third higher low suggests that buying pressure will not let prices fall as low as the previous low. This turning point from selling pressure to buying pressure is called a bottom.
Technical analysis
In finance, technical analysis is security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate technical analysis, which being an aspect of active management stands...
, where prices reach a low, then a lower low, and then a higher low.
The first low signifies the pressure from sell
Sell
Sell can refer to:*A verb relating to sales*Sell *One of several people named Edward Sell *Mary Elizabeth Sell, New York City Ballet dancer*Friedrich L...
ing was greater than the pressure from buy
Buy
Buy may refer to:*Trade, exchange of goods and services*BUY , Burlington, North Carolina*Buy.com, a shopping website*Buy , a 1979 album by James White and the Contortions...
ing. The second lower low suggests that selling still had more pressure than the buying. The third higher low suggests that buying pressure will not let prices fall as low as the previous low. This turning point from selling pressure to buying pressure is called a bottom.