Business, Legal & Accounting Glossary
Descending bottoms refers to a succession of lower lows in a stock’s trading range. One of the easiest ways to see descending bottoms is on a stock chart, with the chart depicting lower lows over time. Descending bottoms can be tracked for virtually any time frame, from hourly, to daily, to weekly, to monthly or even yearly. While not all investors subscribe to the descending bottoms theory, chartists, day traders, market timers and others often see descending bottoms as a sign of a weak or weakening security. Descending bottoms in a stock index could imply a weakening of the overall market. The opposite of descending bottoms is ascending bottoms, and while descending bottoms implies, for some, a weakening of a security, ascending bottoms implies a strengthening of the security.
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This glossary post was last updated: 9th February, 2020