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In this pattern, the stock makes two legs down as it shapes the base. It looks like a lopsided ‘W’ with the second leg undercutting the first.

The pattern is tpically seen in adverse market conditions as stocks make attempts to rally.

Requirements

  • The middle peak should be 5-15 below the previous high;
  • It should form over seven (7) weeks;
  • A handle may or may not form on the right side.

Buy Point

  • 10 cents above the middle peak;
  • If a handle has formed, the buy point would be 10 cents above the high of the handle.