Bulkowski's RABFD Quiz

This is a right-angled and descending broadening formation. The top is horizontal or nearly so, with at least 2 trendline touches. The bottom trendline slopes downward and diverges from the top trendline. Look for at least 2 touches of this trendline, too, but one trendline should have 3 or more touches. Price should cross the pattern from side to side, filling the space with movement (little white space). A rising volume trend (such as shown) results in the best post-breakout performance (on average).

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

This is the pattern I found. Point A is close enough to the top trendline to be called a touch.

Try again! Find as many descending broadening formations as you can.

Here's the broadening pattern. The spike at A is a partial rise, suggesting an immediate downward breakout. Partial rises work half the time.

This chart shows price did close below the line at D, but rebounded to form a more robust partial rise (B). Price has dropped and closed below the green line at C, staging a downward breakout. Do you buy a new long position, hold an existing position, or sell short a new position? If price drops, where do you think it'll stop? I show 4 possible support areas, EFGH, along with the associated price (E, for example is at $23, H is at $19).

Price bottomed, matching line G at 20. Notice the stock bottomed at round number 20, a common area of support (10, 20, 30, and so on).