Broadening Bottoms, Right-Angled and Descending
Identification:
Shape:
Looks like a megaphone tilted down.
A horizontal line on top and the bottom, a down-sloping trend line.
Top Horizontal Line:
Two minor highs nearly the same price level. Premature breakouts are rare, so buy above
resistance.
Once recognizing
the formation:
When the price is going up:
Buy the Breakout Up:
Buy after price closes above the resistance line.
If the Breakout Fails:
Go Short at the High:
Sell short after price has begun to head back down from the top trend
line.
When the price is going down:
Sell the Breakout Down:
Set a sell order below the lower support trend line.
If the Breakout Fails:
Go Long at the Low:
Buy after the stock makes it’s turn up at the lower trend line.
Partial Rise or Decline:
When prices curl around on a partial rise or decline and return to the
trend line, they usually break out immediately.
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