As of 04/26/2024
Indus: 38,240 +153.86 +0.4%
Trans: 15,171 -126.01 -0.8%
Utils: 884 -10.33 -1.2%
Nasdaq: 15,928 +316.14 +2.0%
S&P 500: 5,100 +51.54 +1.0%
|
YTD
+1.5%
-4.6%
+0.3%
+6.1%
+6.9%
|
|
As of 04/26/2024
Indus: 38,240 +153.86 +0.4%
Trans: 15,171 -126.01 -0.8%
Utils: 884 -10.33 -1.2%
Nasdaq: 15,928 +316.14 +2.0%
S&P 500: 5,100 +51.54 +1.0%
|
YTD
+1.5%
-4.6%
+0.3%
+6.1%
+6.9%
| |
| ||
Updated with new statistics on 8/25/2020.
A big W is a double bottom with tall sides. Price often confirms the double bottom and approaches the height of the left side trend start before retracing and forming a handle. Once price completes the handle, the rise resumes.
The above numbers are based on more than 2,100 samples. See the glossary for definitions.
Characteristic | Discussion |
Price trend | Downward leading to the pattern. |
Shape | A big W shape with twin bottoms and tall sides. |
Reversal pattern | Look for a double bottom reversal pattern at the base of the big W. |
Tall sides | The best performing big W chart patterns have tall, straight declines leading to the bottom of the big W. |
Rise between bottoms | The rise between the valleys of the double bottom is 10% to 20% or more. |
Volume | Recedes 69% of the time. |
Breakout Confirmation | The pattern confirms as a valid one when price closes above the highest peak between the two bottoms. |
Consult the associated figure on the right.
Trading Tactic | Explanation | ![]() The Measure Rule
|
Measure rule | Compute the height from the highest peak to the lowest valley (D-B) and then add the result to the price of the peak high D). The result is the target price. The link to the left gives more information about the measure rule. | |
Breakout | Occurs when price closes above the peak high (D). | |
Stall | For swing traders, buy at the double bottom low (E) and ride price upward to confirmation of the double bottom (the high between the two bottoms, D). Price often pauses there. If price drops below the low of the second bottom (E), exit the position immediately. If price confirms the double bottom, expect a rise approaching the left side high (A). | |
Position traders | Wait for confirmation of the double bottom before taking a position and be prepared to sell as the stock nears the price of the left side high (the price at C approaches the price at A). |
The above figure shows an example of a big W chart pattern. Price begins its decline at A and reaches a low at B in just a few months. Price bounces and retraces to form a second low in September (C). The Eve & Adam double bottom confirms as a valid chart pattern when price closes above the confirmation line, as shown. A pretty symmetrical triangle appears during October.
-- Thomas Bulkowski
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