ShapeThe actual patterns in a base on base can include any base types.  In a base on base, what matters most is the condition of the second base. A tight, symmetrical formation is what we want to see. A sloppy of flaw riddled base may suggest the formation is not yet ripe.  A base on base is counted as one structure because the bases are less than 20% apart.

To qualify as a base on base, the second pattern’s peak will be no more than 20% above the buy point of the first. Also, the floor of the second structure should drop to or a below below the top of the first.  If the second base corrects so deeply that it undercuts the low of the first base, it is also not a base on base. This action resets the stock’s overall base count.