http://nolar.info/automatically-activate-virtualenv-on-cd/

.bashrc

#
# Print all possible candidates for virtualenv relative to the directory $1.
# Used in venv_find() for every directory starting from the current and up to the root.
#
function venv_candidates () {
    echo $1
    echo $1/.venv
    echo $1/VENV
    echo $1/ENV
    echo $1.venv
}

#
# Finds the closest virtualenv root directory, starting from $1, and going up to the root.
# If the target directory is not specified as an argument, current directory is used.
# Prints the virtualenv path found, or nothing otherwise.
#
function venv_find () {
    local venv_root=${1:-"."}
    local venv_found=""

    # The cycle is just for the case with broken root folder detection - never do more than N iterations.
    for (( i=10; i > 0; i-- )); do
        local venv_real=$(cd $venv_root && pwd -P)
        local venv_name=$(basename $venv_real)

        # echo REAL=$venv_real >&2
        for candidate in $( venv_candidates $venv_real ) ; do
            # echo CANDIDATE=$candidate >&2
            if [ -f "$candidate/bin/activate" ]; then
                echo $(cd $candidate && pwd -P)
                return
            fi
        done

        if [ "$venv_real" = "/" ]; then
            break
        fi
        venv_root=$venv_root/".."
    done
}

#
# Find current virtualenv, and prints its path.
# NB: The virtualenv must be activated in the current shell, or it will be ignored as if there is
# NB: no active virtualenv at all. This is needed because current virtualenv is usually determined
# NB: to be deactivated, and if it is not in the current shell, there is no "deactivate" function.
#
function venv_curr () {
    if [ -n "$VIRTUAL_ENV" -a "$(type -t deactivate)" = 'function' ]; then
        echo $VIRTUAL_ENV
    fi
}

#
# Activates a virtualenv which we are in (or in any of its subfolders), according to our cwd.
# Deactivates any virtualenv when we leave it (cd to a directory with no venv at all).
#
function venv_auto () {
    venv_new="$(venv_find)"
    venv_old="$(venv_curr)"
    bash_cmd=`basename $(expr "$BASH_COMMAND" : "\([^ ]*\)")`

    # Special case for subshells - they will reactivate their own venv inside. This is needed
    # to properly keep "deactivate" function inside subshells, and avoid recursive venvs.
    if [ -n "$venv_old" -a \( "$bash_cmd" == "mc" -o "$bash_cmd" == "bash" -o "$bash_cmd" == "sh" \) ]; then
#        echo "DEACTIVATE $venv_old FOR $bash_cmd"
        deactivate
    elif [ -z "$venv_new" -a -n "$venv_old" ]; then
#        echo "DEACTIVATE $venv_old"
        deactivate
    elif [ -n "$venv_new" -a "$venv_new" != "$venv_old" ]; then
#        echo "ACTIVATE $venv_new"
        source "$venv_new"/bin/activate
        prompt_colorize
    fi
}

#
# Attach automatic virtualenv detection for any command or action in the shell.
# Works well even if you change dirs in mc.
#
trap venv_auto DEBUG

What is command prompt_colorize?