At times, the top of Eve is bound by a flat shelf that marks an excellent entry point when broken. And similar to many of these sub-patterns, shelf resistance is often located right along the top of the center retracement pivot. This illustrates that the most important focal point subsequent to any suspected double bottom is the relationship between this center pivot and current price.

Less common than the A&E is its cousin, the Eve and Adam pattern. Price first develops support near its low on relatively minor volume in the signature rounded Eve curve. The market attempts a rally, which then fails at common retracement levels. Fear ignites the crowd and price action shifts into a higher volatility state. A sharp and violent drop ensues, hurling the stock back toward its lows. A high volume Adam reversal-spike then prints, often with a price extreme just below Eve's bottom. The subsequent uptrend can skyrocket as the crowd sentiment shifts sharply back toward the positive.

Since DBs occur in downtrends, risk must be managed defensively. The greedy eye wants to believe bottoms and easily fools better judgement. Even spectacular reversals offer little profit if price can't ascend back out of the hole it found itself in. When choosing stop and exit points, violation of a prior low is the natural first choice. Make certain your entry permits you to exit for an acceptable loss at this location. And don't stick around long. Price will gather downside momentum quickly at broken lows as it searches for new support.