Hidden DBS Pattern

Developed at Definedge.

The hidden DBS pattern is a bearish breakout pattern. It indicates that the double bottom sell pattern is being reinitiated.

Click here to know more about double bottom sell pattern.

Below is a picture of the Hidden Double Bottom Sell pattern.

1 – Double bottom sell pattern

2 – The price reverses but doesn’t go above the previous high.

3 – Price moves below the previous double bottom sell level

After the double bottom sell bearish breakout, the price retraced back and went above the breakout level. It doesn’t form a bullish breakout pattern and proves to be a retracement. The price moves back below the Double bottom sell breakout level.

A reversal above the bearish breakout level would cause many bearish breakout traders to exit their short trade. Many traders would create bullish positions. The price moves downward and falls below the double bottom sell level once again . There is a bottom sell pattern hidden within the formation.

Price reversed from the top of point 2 after the retracement, making it a strong top. That can serve as a strong reference point for bearish trades.

A hidden double bottom sell pattern can be used as a bearish entry pattern. The stop-loss can be placed above the previous column high or at the double top buy pattern.

This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.