Category: Money tips Release Date: 2006-10-24
Double Bottom pattern, also known as "W at the end," is an important form of morphology, its trends look like the letters "W". W at the end of formation is a medium-term bottom of the form generally occurs at the end of price band decline, the trend does not appear in the middle of Quotes.
The main features of its market is reflected in: a long-term stock price decline, the experience and reasonable support for a bounce there, but because of pre-fall too deep and not too many rallies to suppress behavior produces a rebound effort, resulting in a second drop. Then when the stock fell to near the previous lows, a dramatic drop in volume. Accompanied by the gradual amplification volume after the stock rose again, and crossed the previous high point, the formation of a breakthrough. After the price break, often withdraw sword. Shares rebound fell back to close near its high for the first time arrested, the subsequent rise.
In theory, "W at the end of" long-short sides can be a clear indication of the strength of the whole process of change: a long-term stock price decline, the shareholders reluctant sellers, reduced trading volume. But bargain-hunting and short covering were set to join, so that a relatively strong share prices rebound. When the stock rebounded to a certain height, pre-lock-plate, as well as short-term profit-plate pouring, so that stock prices fell again. But this drop volume decreased, showing initiative to reduce selling, but investors who missed the previous Quote will take advantage of the callback to buy, so stock prices can not fall to below the previous low. With share prices rebounded, more and more investors to join the buyer's camp, the final price coordination with the enormous volume, breaking the previous high point, the rising trend has been established.
W at the end of form, there are two low and two pick-up from the first one can draw a high level of pressure on the neckline, the stock break up again, it must be accompanied by a big rebound breakthrough, W at the end of the formal establishment be considered. If the break up is unsuccessful, then the stock should continue sideways drift. Shares of breaking through the neckline, the neckline pressure into the neckline support line, the share price will appear at this time withdraw sword, a temporary correction to the neckline near the end withdraw sword, stock Band has begun to rise.
In general, W shape at the end of the second than the first one the best low low low, this would create Powei atmosphere for some bargain-hunting set out to form a bargaining chip in the relative concentration of the bottom of the main afternoon in order to facilitate the lift.
