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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Chart Patterns: After the Buy
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Bulkowski's Big W

Class Elliott Wave Fundamentals Psychology Quiz Research Setups Software Tutorials More...
Busted
Patterns
Candles Chart
Patterns
Event
Patterns
Small Patterns
Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/24/2018
24,024 -424.56 -1.7%
10,400 -221.05 -2.1%
695 4.07 0.6%
7,007 -121.25 -1.7%
2,635 -35.73 -1.3%
YTD
-2.8%
-2.0%
-3.9%
1.5%
-1.5%
Tom's Targets    Overview: 04/13/2018
25,300 or 23,400 by 05/01/2018
10,800 or 9,800 by 05/01/2018
670 or 710 by 05/01/2018
7,400 or 6,800 by 05/01/2018
2,750 or 2,600 by 05/01/2018

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information.

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.

Updated with new statistics on 1/10/18.

A big W chart pattern appears

A Big W chart pattern

 

Important Bull Market Results

Overall performance rank for up/down breakout's (1 is best): Not available yet
Break even failure rate: 7%
Average rise: 48%
Median rise: 30%
Throwback rate: 65%
Percentage meeting price target: 79%

The above numbers are based on 2,125 samples using 693 stocks data from July 1991 to October 2017. See the glossary for definitions.

Big W: Identification Guidelines

CharacteristicDiscussion
Price trendDownward leading to the pattern.
ShapeA big W shape with twin bottoms and tall sides.
Reversal patternLook for a double bottom reversal pattern at the base of the big W.
Tall sidesThe best performing big W chart patterns have tall, straight declines leading to the bottom of the big W.
Rise between bottomsThe rise between the valleys of the double bottom is 10% to 20% or more.
VolumeRecedes 69% of the time.
Breakout ConfirmationThe pattern confirms as a valid one when price closes above the highest peak between the two bottoms.

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Big W: Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation
Measure ruleCompute 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.
BreakoutOccurs when price closes above the peak high (D).
StallFor 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 tradersWait 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).

Big W measure rule

The Measure Rule

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Bull Market Performance Over Decades
Breakout Direction1990s2000s2010s
Up (average)44%52%46%
Up (median)30%31%28%
Samples529662531

Big W: Time Performance

The table on the right shows the performance of Big W chart patterns in bull markets over the last three decades.

The 2000s outperformed the other two periods with the 2010s placing second.

 

Big W: Example

A big W chart pattern example

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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Other Big W Examples

See Also

Written by and copyright © 2005-2018 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. Any minute now I'll jump in with pointless observations.