As of 08/19/2019
  Indus: 26,136 +249.78 +1.0%  
  Trans: 10,081 +114.06 +1.1%  
  Utils: 836 +5.18 +0.6%  
  Nasdaq: 8,003 +106.82 +1.4%  
  S&P 500: 2,924 +34.97 +1.2%  
YTD
 +12.0%  
 +9.9%  
 +17.3%  
 +20.6%  
 +16.6%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019
As of 08/19/2019
  Indus: 26,136 +249.78 +1.0%  
  Trans: 10,081 +114.06 +1.1%  
  Utils: 836 +5.18 +0.6%  
  Nasdaq: 8,003 +106.82 +1.4%  
  S&P 500: 2,924 +34.97 +1.2%  
YTD
 +12.0%  
 +9.9%  
 +17.3%  
 +20.6%  
 +16.6%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019

Bulkowski's Big W

 

Updated with new statistics on 1/10/18. Rank updated 7/25/19.

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.

A big W chart pattern appears

A Big W chart pattern

 

Big W: Important Bull Market Results

Overall performance rank (1 is best): 11 out of 56
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 Big W measure rule
The Measure Rule
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).

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Big W: Time Performance

Bull Market Performance Over Decades
 Breakout Direction  1990s  2000s  2010s 
Up (average)44%52%46%
Up (median)30%31%28%
Samples529662531

The above table 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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More

Other Big W Examples

See Also

 

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My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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Any minute now I'll jump in with pointless observations.Smiley