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Broadening Top

The Broadening Top has two diverging trendlines at the top of an uptrend. Signals bearish reversal.

ExpandingBroadening Top: 2 lines diverge → Break uncertain

Pattern Details

Category

reversal

Success Rate

61%

Average Move

-12%

Duration

2-4 weeks

Pattern Structure

Pattern Structure
Key components that define this chart pattern
  • 1
    Upper trendline: Slopes upward
  • 2
    Lower trendline: Slopes downward
  • 3
    Two lines expand like an inverted funnel

Trading Rules

Trading Rules
Essential rules for trading this pattern successfully
  • ✓
    Enter short position when price breaks below lower trendline
  • ✓
    Volume is typically inconsistent
  • ✓
    Target = Maximum height of the pattern
  • ✓
    Stop loss placed above highest peak
Trading Tips
  • Also called "Megaphone" pattern
  • Lower success rate than other patterns
  • Requires additional indicator confirmation

Statistics

Breakout Statistics
Bullish Breakout39%
Bearish Breakout61%
Performance Metrics
Average Rise+8%
Average Decline-12%
Pullback Rate18%