A technical chart pattern recognized by analysts, known as a broadening formation or Megaphone Pattern, is characterized by expanding price fluctuation. It is represented by two lines, one ascending and one descending, that diverge from each other. This pattern typically appears after a significant increase or decrease in security prices and is denoted by a...
The NYSE composite has spent the last year building a classic broadening top pattern. The pattern develops as strong hands distribute to weak hands, and when it occurs, often marks a transition from bull to bear.
1. Broadening formations are relatively rare and because the pattern itself is difficult to trade systematically (as the boundaries are continually...