EBAY another example of double bottom P&F breakout. The double bottom breakouts are simply areas of support. This area would be where say EBAY is showing selling pressure. Let's say EBAY is trading at 33 or 34, http://www.marketgems.com/EBAY_3_18.gif when it gets closest to 31 it is met with some selling pressure, if it resists and the demand comes back it will move back up to 33 or 34 and finally to 43. The next time it nears 31, somthing happens. The selling pressure finally knocked EBAY to 31, at the bears have won. But this could be only temporary. They won the battle but not the war. And if we can ANTICIPATE where the break will be we can set up our short target right there. This is say battle one, but at battle two, Shorters might cover and once again EBAY moves back up and hits say 35 a share, a former area of resistance. At this point when EBAY begins to move up it will test the short term Fibonacci retracements, marketed at 33 1/4, 33 7/8 and 34 1/2 these would be the PIVOT points that EBAY must pass to get closer to a reversal of the downtrend.
The reversal can start anywhere along the price line above 31 to say 35. The point is during down markets it doesn't get to retest that breakout area (31) but instead it just continues to move down and that is what are interested in AT THIS POINT, we are ONLY looking to catch that final break from support.
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