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