First of all we will understand ‘W’ formation and same is formed by a sharp decline followed by a sharp upward movement and than again a second sharp downward movement and again followed by a sharp upward movement. This type of pattern creates a formation of a pattern which resembles ‘W’. We will now study this pattern with Nifty chart for better comprehension.
‘W’ formation in parlance of technical analysis can be termed as bullish when it meets the following requirements:
- Now this pattern of ‘W’ becomes a bullish pattern once the second upward movement surpasses each of the two previous high points.
- As we can see from the below screen shot of the chart we find that Nifty deep support exists at 4700 with a stiff resistance at 5200-5330.
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