Event patterns happen in the market, be it related to earnings, analyst downgrades or bad news. Research shows almost half bottom within one week. The security is usually trending down before the actual event (almost like smart money already knows what is coming )o:
Bottoms can be hard to trade and beware of the dead cat bounce. The dead cat bounce is an event pattern where price makes a dramatic decline, bounces up, only to decline at a more leisurely rate. If you own the security in question,it can be best to wait for the possible bounce up that will often break through the prior gap down to sell.
The gap down can become resistance.
No recommendation
The bottom is not always the bottom )o:
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I like looking at the 3 year weekly to find where a drop this drastic may find support. Examples Dead Cat Bounce: ACAD was pounced on by the cat recently, SRPT a few months ago. I am sure there are many more examples.
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Another issue with bottoms is to figure out if anyone is answering? lol