Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 90

Figure 7.3 shows what the failure of a big W to perform looks like. The big W is at ACB, with A and B being the bottoms and C being the hill between the bottoms. Price drops from H in a long and steep move to the first bottom. The stock confirms the pattern as valid at D, where it closes above the horizontal line drawn from the high at C.

Price spikes higher at E, but closes the trading day near the bottom of the price bar, at F. That close is below the lower of the two bottoms (A). The breakout from this big W was upward (at D), but price reversed and closed below the bottom of the big W, busting the upward breakout.

Figure 7.3 Price busts the upward breakout from this big W.

Volume (G) in this example slopes upward from A to B. Table 7.6 says that volume slopes downward 69% of the time on average, and yet all three figures shown so far have upward volume.

Why did this big W fail to rise back to the launch price (H), the point where the long downtrend leading to point A began?

We can only speculate as to the answer. I checked the Internet for news at price bar EF and found that the company released second‐quarter earnings before the market opened. Apparently the stockholders couldn't make up their minds about the news. Sometime during the day, price climbed up to E (perhaps on news that the company settled a patent dispute). Once price dropped below bottom B, it may have triggered stops, helping price decline to F. In this case, it appears the earnings announcement prevented the big W from fulfilling its promise of rising to H.