A Tweezer Bottom is a bullish reversal pattern seen at the bottom of downtrends and consists of two Japanese candlesticks with matching bottoms.
The matching bottoms are usually composed of shadows (or wicks) but can be the candle’s bodies as well.
A Tweezer Bottom occurs during a downtrend when sellers push prices lower, often ending the session near the lows, but were not able to push the bottom any further.
Tweezer Bottoms are considered to be short-term bullish reversal patterns that signal a market bottom.
To identify a Tweezer Bottom, look for the following criteria:
- There must be two or more consecutive candles of either color.
- A clear downtrend should be present.
- Both candles must reach the same low point.
Once you have a downtrend, simply look for candles that have the same lows.
Although you shouldn’t completely ignore the body color and the shape of the candles, these factors are not that important.
The two candle’s lower shadows signify an area of support.
The bears were not willing to sell below that lowest price, so the bulls returned and overpowered the bears, pushing the price back up.
Since two or more candles formed shadows at this same level confirms the strength of the support and shows that the downtrend has likely paused or worse, has reversed into an uptrend.
Like the Tweezer Top, the Tweezer Bottom is viewed as a reversal pattern.
To better analyze a specific Tweezer Bottom, observe the following:
- If the Tweezer Bottom appears at market lows, it is more reliable.
- If the first candle has a large body and the second has a short body, the reversal is more reliable.
- If the Tweezer Bottom is followed by another reversal pattern, such as a Bullish Engulfing or Piercing Line pattern, with identical lows, it is even more reliable.