Double Bottom Reversal Strategy (Lookback = 5)

This scanner focuses on stocks that have formed a double bottom pattern, indicating a potential bullish reversal after a short-term downtrend. Using a lookback period of 5 candles, it identifies stocks where support has held twice and a breakout above the neckline signals renewed buying pressure. These setups are commonly used for short- to medium-term swing trades.

The strategy uses the following conditions:

• Double bottom formation
  The price forms two consecutive lows at roughly the same level over the last 5 candles, separated by a local peak (neckline). These lows indicate strong support and a potential reversal point.
• Neckline identification
  The highest point between the two bottoms is the neckline. A break above this level confirms the bullish reversal and triggers the trade signal.
• Breakout confirmation
  Price must close above the neckline. This breakout is ideally accompanied by higher trading volume, indicating strength and conviction in the move.
• Retracement of neckline
  After breaking above the neckline, price may retrace back to test it. A bounce off the neckline confirms it as new support and strengthens the bullish signal.
• Short-term trend alignment
  The stock should ideally be trading above a key moving average such as the 50-day or 200-day moving average to align with the broader trend.
• Recent consolidation
  The pattern works best when the market has shown a short consolidation or pullback before the second bottom, which increases the reliability of the breakout.

This strategy focuses on identifying strong support zones and breakout opportunities, making it suitable for traders looking to capture early bullish reversals in stocks that have stabilized after a short-term decline.