ALL >> Investing---Finance >> View Article
How To Spot A Bullish Base-on-base Chart Pattern
With the stock market turning volatile this year, many stocks have formed base-on-base patterns. Keep an eye out for those, because they tend to be strong chart formations. The base-on-base is, of course, a combination of two bases. The stock forms a base but does not rise much in price from the buy point. That’s often because the general market comes under selling.
So, a new base starts taking shape at a higher elevation than the first. On a chart, the two patterns resemble the profile of two stair steps. Sometimes, the breakout from the second base will come after the selling pressure in the market has lifted.
Here are five characteristics to help identify the pattern:
The two bases can be of any proper type: cup-with-handle, flat base, double bottom, cup-without-handle. Usually, though, the second pattern is a flat base.
The second base should not encroach much into the price levels of the first. Any base that sinks much into the first base is not a proper base-on-base formation.
The buy point is determined by the second base, whatever that is.
When counting bases, a base-on-base ...
... formation counts as a single stage.For example, don’t count a cup-with-handle as first stage and a flat base on top of it as a second-stage base.
If a stock climbs more than 20% from its buy point before it starts forming the second base, consider the two patterns entirely separate, not a base-on-base.
Disclaimer: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. It is for educational purposes only.
Investment advisory product based on William O’Neil’s CAN SLIM method with model portfolio, pattern recognition, idea lists powered by institutional quality data
Add Comment
Investing / Finance Articles
1. The Investor Co - Trade With ConfidenceAuthor: Taramalhotra
2. A Deep Dive Into The Leading Investment Banking Firms In Hyderabad
Author: Verity knowladge solutions
3. Can Foreigners Buy Property In Ajman?
Author: tarek
4. When Will Same Day Loans Online Be Paid Into My Bank Account?
Author: Jockey Ferguson is a financial adviser of Fast Pay
5. The Role Of Exclusive Solar Appointments In Accelerating The Solar Revolution
Author: Shan Tait
6. Wills Vs. Trusts: Key Insights For Effective Estate Planning
Author: Daniel Stewart
7. The Impact Of Financial Institutions Groups On Global Markets
Author: Verity knowladge solutions
8. How Property Investment Professionals Drive Long-term Wealth Creation
Author: Rick Lopez
9. Private Company Registration Bangalore | Company Incorporation
Author: mwseo
10. Ecommerce Loan With Overdraft Facility For Your Business
Author: Tarun
11. Does The Online Application Process For A Short Term Loans Require A Credit Check?
Author: Jockey Ferguson is a financial adviser of Fast Pay
12. The Impact Of Customer Reviews On Solar Appointment Leads
Author: Shan Tait
13. What Happens If You Don’t Use Insurance Money For Repairs?
Author: john
14. How To Earn Money Online Without Investment In Mobile?
Author: john
15. Is It A Good Idea To Give Money To Beggars?
Author: john