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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski's Right-Angled and Descending Broadening Formations

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As of 08/28/2014
17,080 -42.44 -0.2%
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17,300 or 16,700 by 09/15/2014
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4,600 or 4,300 by 09/01/2014
2,050 or 1,950 by 09/15/2014

Written by and copyright © 2005-2011 by Thomas N. Bulkowski. All rights reserved.

For more information on this pattern, read Encyclopedia of Chart Patterns, Second Edition, pictured on the right, pages 45 to 62. That chapter gives a complete review of the chart pattern, including tour, identification guidelines, focus on failures, performance statistics, trading tactics, and sample trade. Below is just a sliver of the information contained in the book.

The right-angled and descending broadening chart pattern is the worst performing chart pattern in a bull market. The break even failure rate is high and the average rise is meager. This is not a chart pattern you'll want to curl up with at night and dream about unless you like losing money.

Right-angled broadening formation, descending
Right-Angled and Descending Broadening Formation


Important Bull Market Results

Overall performance rank for up/down breakouts (1 is best): 23 out of 23; 13 out of 21
Break even failure rate for up/down breakouts: 19%; 14%
Average rise/decline: 28%; 15%
Throwback/pullback rate: 52%; 51%
Percentage meeting price target for up/down breakouts: 63%; 44%

The above numbers are based on hundreds of perfect trades. See the glossary for definitions.

Right-Angled and Descending Broadening Formation Identification Guidelines

Price trendCan be up or down leading to the pattern.
ShapeA megaphone tilted down with the top horizontal.
TrendlinesThe top trendline is horizontal, the bottom one slopes downward.
TouchesAt least two peaks and two valleys should touch their respective trendline.
Volume shapeTrends upward 54% to 59% of the time with a dome shape.
BreakoutUpward 51% of the time.


Right-Angled and Descending Broadening Formation Trading Tips

Trading TacticExplanation
Measure ruleCompute the height from the horizontal trendline (B in the Measure Rule figure to the right) to the lowest valley (A) and multiply it by the above “percentage meeting price target.” Add the result to the horizontal trendline (B, upward breakouts) or subtract it from the lowest valley (A, downward breakouts) to get the price target (C).
Intraformation tradeBuy at the bottom trendline when price starts rising and sell or sell short once price turns at the horizontal trendline.
Buy at 3rd touchWhen price touches the bottom trendline for the third time and begins rising, buy.
Partial riseA partial rise works 54% of the time.
Partial declineA partial decline works 63% of the time.
Price trendThe best performing patterns are those with an intermediate- or long-term (over three months) price trend leading to the pattern.
Yearly middleFor both breakout directions, the middle third of the yearly price range performs best. For downward breakouts, the highest third also performs well.
Volume trendA rising volume trend results in the best post breakout performance.
Throwbacks and PullbacksThrowbacks and pullbacks hurt post breakout performance.
Right-angled and descending broadening formation measure rule
The Measure Rule


Right-Angled and Descending Broadening Formation Example

Right-angled and descending broadening formation example

The above figure shows an example of a right-angled and descending broadening formation chart pattern. Price begins a decline at A that leads to the chart pattern. Price bounces between a horizontal trendline on the top and a down-sloping one along the bottom of the chart pattern. A partial decline at B signals an impending upward breakout at C. After the breakout, price makes a strong move upward.

-- Thomas Bulkowski


Other Right-Angled and Descending Broadening Formation Examples

See Also

Copyright © 2005-2011 by Thomas N. Bulkowski. All rights reserved. Does the information superhighway have any rest stops?