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Broadening Right Angled Ascending Pattern

Prices get taller as time progresses, the broadening triangle has a flat bottom and a risin top

Broadening Right Angled patterns are like Broadening Tops and Bottom, except that one resistance or support trendline is horizontal. The Broadening Right-Angled Ascending pattern has a horizontal support line and a rising resistance line.

Broadening Right Angled Descending Pattern

The price range of the broadening triangle increases as time progress with the top being horizontal and the bottom descending

In contrast, the Broadening Right-Angled Descending pattern has a horizontal overhead resistance line and a declining support trendline.

Ascending Broadening Right-Angled Breakout Direction

graphic showing green arrow pointing upward and red arrow pointing downward signifying the breakout direction of the ascending broadening right-angled pattern

According to Bulkowski's (2005) research, the price trend prior to the Broadening Right-Angled Ascending pattern is more often an uptrend (67% of the time) versus a downtrend (33%) and prices break out of the pattern to the downside 66% of the time versus breaking upward 34% of the time.

Descending Broadening Right-Angled Breakout Direction

graphic showing green arrow pointing upward and red arrow pointing downward signifying the breakout direction of the descending broadening right-angled pattern

The Broadening Right-Angled Descending pattern breaks to the upside 51% of the time versus the downside 49% of the time (Bulkowski, 2005).

Important Traits for Broadening Right-Angled Patterns

Bulkowski (2005) suggests the following traits increase the effectiveness of both the ascending and descending broadening right-angled patterns:

  • The ascending pattern performs best in trends that are less than three months; the descending pattern performs best in trends that are more than three months.
  • Tall ascending patterns outperform short ascending patterns.

Price Targets

For price targets, the height of the broadening right-angled ascending or descending pattern is added to the breakout above resistance or subtracted from the breakout below support to arrive at a price target. However, Bulkowski (2008) offers the following price targets calculated from his historical chart research:

Broadening Right-Angled Ascending Breakout Upward: Price of Breakout Above Resistance + ((Highest High of Formation - Lowest Low of Formation) * 68%)
Broadening Right-Angled Ascending Breakout Downward: Price of Breakout Below Support Price - ((Highest High of Formation - Lowest Low of Formation) * 32%)
Broadening Right-Angled Descending Breakout Upward: Price of Breakout Above Resistance + ((Highest High of Formation - Lowest Low of Formation) * 63%)
Broadening Right-Angled Descending Breakout Downward: Price of Breakout Below Support Price - ((Highest High of Formation - Lowest Low of Formation) * 44%)

Broadening Right-Angled Ascending Chart Example

stock chart showing a broadening right-angled ascending pattern breakout to the downside

The chart above of Microsoft (MSFT) illustrates a broadening right-angled ascending pattern where prices enter from above (occurs only a third of the time) and exits below (occurs two-thirds of the time). Using the typical height of pattern minus breakout price would have resulted in a failed trade; however using Bulkowski's height of pattern multiplied by 32% would have resulted in a profitable trade.

Broadening Right-Angled Descending Chart Example

stock chart of AT&T with a broadening right-angled descending pattern where prices broke to the upside

The chart above of AT&T (T) illustrates a successful broadening right-angled descending pattern with an upward breakout. "Successful" is emphasized because according to Bulkowski's (2005) research, the broadening right-angled descending with upward breakout is the very worst of 23 patterns in performance. Nevertheless, using the two price target formulas, including the typical height of pattern plus breakout price would result in a profit.

This particular chart is interesting for another reason – when prices don't rally back to the opposite trendline from where they just bounced off of, but rather rollover back to the trendline from whence they came, then this can be very suggestive of direction of the breakout. However, the first hint was a false hint when prices rallied off of the downtrend support and moved up halfway before rolling over. Typically, a trader would expect prices to break to the downside, but that did not happen. However, the next hint occurred when price retreated only a third below the overhead resistance; this suggested that buyers were entering far earlier than expected. This bullish expectation was fulfilled when prices broke above overhead resistance and moved higher.

Works Referenced

  1. Kirkpatrick II, C.D., & Dahlquist, J.R. (2010). Technical Analysis: The Complete Resource for Financial Market Technicians (2nd ed.). Upper Saddle River, NJ: FT Press.
  2. Rockefeller, B. (2011). Technical Analysis For Dummies (2nd ed.). Hoboken: John Wiley & Sons.
  3. The Pattern Site. (2008). Bulkowski's Measure Rule. Retrieved June 1, 2012, from http://thepatternsite.com/measure.html
  4. The Pattern Site. (2005). Bulkowski's Broadening Formations, Right-Angled and Ascending . Retrieved June 1, 2012, from http://thepatternsite.com/rabfa.html
  5. The Pattern Site. (2005). Bulkowski's Right-Angled and Descending Broadening Formations . Retrieved June 1, 2012, from http://thepatternsite.com/rabfd.html