Broadening Bottom Quiz

A broadening bottom has at least 5 trendline touches, three on one side and two on the other. It can have more than 5 touches, though. Each touch should be a minor high or minor low. If a trendline cuts through price, say at pattern start, then it's not a touch. This broadening bottom has 6 touches, numbered. Price trends down into the start of the pattern, making it a bottom and not a top. Ignore any overshoot or undershoot in the 5 or so days preceding the start of the pattern when determining if it's a top or bottom. In this example, the breakout is below the bottom of the pattern, shown by the green line. Point A shows where a pullback ends.

Find as many broadening bottoms as you can. For help, click here.

This broadening bottom also has 6 touches. Price trends down into the pattern if you ignore the undershoot (B). A throwback occurs at A.

Find as many broadening bottoms as you can. For help, click here.

A broadening bottom or top at C appears. This has undershoot (D, E), but it's more than a week long, so if you thought this is a broadening top, then that's fine. I think I called it a broadening top, too. Price pokes above the top trendline at C, but that's okay. The red broadening bottom has 5 touches. Three on the top and 2 on the bottom. Because the trendline slices through price bar B at the start, it does not qualify as a trendline touch. A partial decline at A suggests an upward breakout. Click the link for more information. Price breaks out upward when it closes above the top of the broadening bottom. Do you buy?

The broadening pattern is at A. Because price formed a base (price trended down then went sideways since January), there was a good chance the stock would recover. The partial decline is at E. In this example the volume trend at C is upward, which many broadening bottom patterns have. As price rises, if forms a rising wedge (B). This has a downward breakout. Do you sell or hold on? Price reaches the measure rule target for rising wedges with downward breakouts 46% of the time. What is the target in this case, using the measure rule? Need help? Click the link.

Point A is the bar where price breaks out downward from the wedge. It pulls back to B then drops to C. The target is the bottom of the wedge, or D. In this case, price drops to C, where it forms a double bottom. That double bottom confirms as valid when price closes above the peak between the two bottoms, at E. Price rises to the measure rule target for double bottoms, at F. If you were a swing trader, buying the day after the breakout and selling after the wedge breakout were the right choices.