Oil is back and is back strong. After an almost 60% decline in only a few months, oil seems to have stabilized and might have finally found a bottom. This is excellent news for bottom fishers who have been speculating about this event for several months now. Finding a bottom however is not an easy task. Remember we’re not trying to buy at the absolute lowest price as this is impossible. Instead, we want to buy after a bottom reversal pattern has been completed and then hold on as the security moves higher. The following chart shows one of the most common reversal patterns taking shape in the price of oil – the double bottom formation.
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