Funny what your mind locks onto. I had the privilege of watching two charts and saw patterns setting up. I saw an “M” and a “W” so I drew my line at the neckline and waited patiently for a break of the neckline to time a good entry.
I watched as the stock kept bouncing off the necklines that I had drawn. And I watched some more, still waiting for the break. In the meantime, I missed a beautiful move using the neckline as a support on the “M” and resistance on the “W”.
Potential setups do not always mean that the expected will happen. (Potential being the operative word here)
You need to be mindful and prepared for your setup to shift quietly into a different pattern, like the start of a downtrend on an “M” neckline and the start of an uptrend on a “W” pattern.
The neckline of an “M” or “W” can be quite informative.
1. “W”pattern with the second bottom being higher is a more bullish pattern especially when found at a support area.
2. “W” pattern where both bottoms are close to equal can still be bullish but less so than the W with the higher bottom. Again, especially if found at a support area.
Speaking of opportunities, Robert Roy taught the W pattern or Double Bottom in his Monster Market Movers online class. You should check it out.
Monster Market Movers