Category: Money tips Release Date: 2006-10-28
Also known as the W at the end of a double bottom is a bottom in prices, bullish reversal pattern. In the real form of the frequency of this disk is relatively high, so that the W shape at the end of the study, for investors is also necessary.
Double bottom theory tells us: When the price dropped to a low A, after the first rebound will rise, but at point B are from the downward trend lines, moving averages such as resistance to repression and ascribed to come down again out of the drop Trend
. But when prices are low to run into with the previous position of considerable, due to Kongfangliliang of failure, unable to hit a new low price, which once again turned around and picked up (the formation of another high-point of C, with A high point), so constitute the end of a W shape.
Once the W at the end of the true shape, can achieve a measure of future price increases will be a form of height, that is, the lowest price point to the vertical height between the neckline bit.
Here we combine the actual situation of this form more in-depth study:
1. In fact, in reality the end of the W shape, there is the distance between the two low asymmetry situation. In this case, although the form of the same set up, but the form is completed the actual results are different. We Erdos (600,295) as an example, Zhou K line, the unit since October 19, 2001, after the formation of large Yinxian, in the second week out of the first wave of the rally, and the prices lasts for 5 weeks, at the end of November formed a neckline, and on this was formed after the fall, this time down Quotes duration is 6 weeks. When the embryo after the formation of a double-dip, the stock's trend, and did not show up too strong intention. This shows that the double bottom of the build process, if the part-time form on the left than the right part of the short, will weaken the effectiveness of after the formation of a double-dip.
2. Real-plate operation, W, after the end of the formation, often there is a price drop of the stock market will be, but it will be technical support from the neckline bit, in fact can also be interpreted as a form is completed, also need to withdraw sword neckline bits confirmation.
3. The longer form of build, shape effect after the completion of the longer. If the patterns to build a short time, the technical sense that its shape is not large, it is necessary to pay attention to the user. In general, the double bottom formation time in the six months to one year less than the most effective.
Edited in the gold-line
