Tweezer Bottoms Pattern

A Candlestick Pattern

Tweezer bottoms are a candlestick pattern (Candlestick terminology) similar to the widely known double-bottom pattern (non Candlestick) - the basic difference is that tweezer bottoms have a much shorter time frame.

A tweezer bottom occurs when the price holds twice at the exact price. The time frame can be on two consecutive days or up to around eight, any more than this and you would be looking at a double bottom formation. This formation is significant because twice in a short period of time sellers were unable to push the stock lower. Therefore, tweezers basically signify a very short-term support level.

Example

The following example below is the daily chart of Downer EDI (DOW) from mid-December 2006 to mid-February 2007. 

The chart above indicates that there were two tweezer bottoms in January, both are highlighted in yellow. Notice that the first tweezer bottom would have been very difficult to trade because the MACD (green rectangle) wasn't showing any bullish signs, although the RSI was showing a bullish signal (grey rectangle). Realistically it would have been a very risky trade to enter on just these signals. 

Notice however that when the second tweezer bottom occurred, the MACD and RSI were showing bullish signals. Furthermore, the second tweezer bottom formed a 'double bottom' like formation with the first tweezer bottom. 

NB: It must be pointed out from a theoretical technical point of view, both tweezer bottoms didn't have the exact same lows as the individual candles had a 1 cent difference. Technically speaking they are not tweezers however for the day-to-day pragmatic trader, they do indicate short-term support.