- The second bottom dipped to around the same amount as the first dip. Usually the strongest of patterns will see this dip further down. Given how close it was, I’d say its still a good sign for the pattern
- The middle peak of the W reached above the halfway mark of the W. The strongest double bottoms will see the middle of the W peak somewhere in the top-half of the pattern.
- The pattern was fairly uniform and had a strong price pickup on the right side. This shows buyers were confident with picking the stock up. It also shows there was not much resistance on its way up.
- The breakout day as the stock passed the buy point of $1,064.84 saw average volume, only 3.84% higher than the daily average. The strongest double bottoms will show high volume on breakout of at least 50% above the daily average.
- Boston Beer stock – SAM – Is now 5.4% passed the official buy point of the pattern. In general, traders want to pick up the stock within 5% of the buy point. Given how close it currently is, if you like the company and think it is a good investment, it does appear to be in a comfortable spot.
As always, Stock Tavern is not suggesting you buy or sell this stock, and this analysis should not be taken as financial advice. Always do your research and make your own decisions, we all have different risk profiles and therefore no trade is right for everyone.
Disclosure: I have no current position in SAM