Very long handles are failure prone. Sometimes, a stock will tear out of a double-bottom base without putting in a pivot. You can still buy, but volume becomes even more critical. Buy only when volume appears authoritative. Of course, in all cases, handle or no, set an initial protective stop capping your losses to an acceptable level in the event your new buy turns against you.
Markets can undergo double bottoms as well.
You can either use this to buy securities that track your market or simply as yet another confirmation technique to spot when a tradable rally has begun. When using this technique for gauging overall markets, the issue of overhead supply is less of a factor. You can throw out the requirement that the index overcome its mid level before the buy. After all, you're looking for a signal to help you enter early into a fresh rally, not late. The Nasdaq Composite formed a double-bottom pattern in the second half of 1998.