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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 Ascending Broadening Wedge

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During writing of my book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book., I thought of broadening tops and bottoms then wondered if similar patterns would appear if the megaphone shape were tilted up. That is how I discovered the ascending broadening wedge chart pattern. I am not claiming to be the first one to identify it. The list of chart pattern analysts is long and chart patterns have been around for decades. Certainly someone before me probably discovered them.

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Pictured is an ascending broadening wedge

Ascending Broadening Wedge

Ascending Broadening Wedge Overview

The ascending broadening wedge is a chart pattern that tends to disappear in a bear market. Most often, you'll find them in a bull market with a downward breakout. For more information see pages 81 to 97 of the book Encyclopedia of Chart Patterns, Second Edition and read the following...

Important Bull Market Results for Ascending Broadening Wedge

Overall performance rank for up/down breakouts (1 is best): 6 out of 23; 14 out of 21
Break even failure rate for up/down breakouts: 2%; 11%
Average rise/decline: 38%; 17%
Throwback/pullback rate: 50%; 57%
Percentage meeting price target for up/down breakouts: 69%; 58%

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

Ascending Broadening Wedge Identification Guidelines

CharacteristicDiscussion
Price trendCan be up or down leading to the pattern
ShapeA megaphone tilted up. Refer to the above figure.
TrendlinesBoth trendlines slope upward. The top one slopes more steeply than the bottom one.
TouchesAt least three peaks and three valleys should touch their respective trendline.
VolumeIrregular but trends upward 64% of the time.
BreakoutDownward 73% of the time.
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Ascending Broadening Wedge Trading Tips

Trading TacticExplanation Measure rule for ascending broadening wedges
Measure rule for downward breakouts
Measure ruleRefer to the two figures on the right. For downward breakouts, use the lowest valley in the pattern as the target. For upward breakouts, compute the difference between the highest peak (point A) and lowest valley (B) in the pattern to get the height. Multiply the height by the above “percentage meeting price target” and add it to the breakout price ( A) to get the price target (C).
Intraformation tradeSince the bottom trendline slopes upward, do not short this pattern at the top trendline. Go long at the bottom when price bounces off the bottom trendline, heading up.
Buy at 3rd touchWhen price touches the bottom trendline for the third time and begins rising, buy. This is for aggressive traders because the breakout is often downward.
Partial riseA partial rise works 74% of the time. See the link on the left for more information.
Partial declineA partial decline works 35% of the time. See the link on the left for more information. Measure rule for ascending broadening wedges
Measure rule for upward breakouts
Price trendFor upward breakouts, the best performing patterns are those with a short-term (less than three months) move leading to the pattern. Downward breakouts do better with a long-term move (over six months) leading to the pattern.
Yearly lowDownward breakouts perform best when the breakout is within a third of the yearly low. For upward breakouts, performance is constant among the three ranges (high, middle, and low). The link on the left provides statistics and this link gives additional information.
Throwbacks and pullbacksThrowbacks and pullbacks hurt post breakout performance. The links on the left define throwbacks and pullbacks. These links for throwbacks and pullbacks discuss performance.
Continuations76% break out in the same direction as that leading to the pattern.
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Ascending Broadening Wedge Example

An ascending broadening wedge chart pattern example

The above figure shows an example of the ascending broadening wedge chart pattern. The only thing remarkable about this wedge is that a partial decline occurs after the breakout. Technically, that means a partial decline did not occur (because it is after the breakout), but it sure looks pretty on the chart.

-- Thomas Bulkowski

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Other Ascending Broadening Wedge Examples

  • S & P 500 shows an ascending broadening wedge in Aug-Nov 2009.
  • Dow Industrials shows an ascending broadening wedge in late 2009.

See Also

Written by and copyright © 2005-2016 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions. See Privacy/Disclaimer for more information. My kids rob me blind and then make me the getaway driver.