Broadening formations are rare price patterns.
Broadening Bottom
Bullish reversal pattern
Also called a "Megaphone Bottom"
Appears at the end of a downtrend
Looks like an inverted triangle
Consists of 2 higher peaks and 3 lower troughs
Pattern starts narrow then widens
Diverging trendlines
Volume expands as the formation progresses
Breakout occurs with a close above the 2nd higher peak (point4)
Price target: add 2/3 of the widest part of the pattern to the breakout point
Broadening Top
Bearish reversal pattern
Also called a "Megaphone Top"
Appears at the end of an uptrend
Looks like an inverted triangle
Consists of 3 higher peaks and 2 lower troughs
Patterns starts wide then widens
Diverging trendlines
Volume expands as the formation progresses
Breakout occurs with a close below the 2nd lower trough (point4)
Price target: add 2/3 of the widest part of the pattern to the breakout point
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