As of 04/18/2024
Indus: 37,775 +22.07 +0.1%
Trans: 14,947 -39.62 -0.3%
Utils: 860 +6.95 +0.8%
Nasdaq: 15,602 -81.87 -0.5%
S&P 500: 5,011 -11.09 -0.2%
|
YTD
+0.2%
-6.0%
-2.4%
+3.9%
+5.1%
|
 39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 |
As of 04/18/2024
Indus: 37,775 +22.07 +0.1%
Trans: 14,947 -39.62 -0.3%
Utils: 860 +6.95 +0.8%
Nasdaq: 15,602 -81.87 -0.5%
S&P 500: 5,011 -11.09 -0.2%
|
YTD
+0.2%
-6.0%
-2.4%
+3.9%
+5.1%
| |
|
39,800 or 37,150 by 05/01/202416,200 or 15,000 by 05/01/2024885 or 850 by 05/01/202416,700 or 15,800 by 05/01/20245,250 or 5,025 by 05/01/2024 | ||
Statistics updated: 8/26/2020.
For more information on this pattern, read
Encyclopedia of Chart Patterns
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Performance of descending broadening wedges is near the bottom of the list. You'll find found most often with upward breakouts in a bull market. Downward breakouts are rare. As with other broadening patterns, partial rises and declines predict the breakout direction. Partial declines work particularly well, but are difficult to distinguish from the pauses that normally occur as price bounces from trendline to trendline.
Descending Broadening Wedge
|
The above numbers are based on 757 perfect trades. See the glossary for definitions.
| Characteristic | Discussion |
| Price trend | Can be up or down leading to the pattern. |
| Shape | A megaphone tilted down. |
| Trendlines | Both trendlines slope downward. |
| Touches | For proper identification, look for at least five trendline touches (three or more touches of one trendline, two or more of the other) at minor highs or lows. Price cutting through a trendline doesn't count as a touch (that happens most at the start and breakout of the pattern). |
| Volume trend | Trends upward. |
Consult the associated figure on the right.
| Trading Tactic | Explanation |  The Measure Rule
|
| Measure rule | For upward breakouts, use the highest peak (A) in the chart pattern as the target. For downward breakouts, compute the difference between the highest peak (A) and the lowest valley B in the chart pattern to get the height. Multiply the height by the above "percentage meeting price target" and then subtract it from the lowest valley (B) to get a price target. | |
| Intraformation trade | Short at the top (1) when price heads down. Cover at the bottom trendline (2). | |
| Buy at 3rd touch | When price touches the bottom trendline for the third time (see point 3) and begins rising, buy. Price may breakout on the following trip across the chart pattern. | |
| Short at the top | When price touches the top trendline (1) and begins falling, sell or sell short. | |
| Partial rise | A partial rise works just 36% of the time, so don't rely on it. | |
| Partial decline | A partial decline works 79% of the time | |
| Price trend | For upward breakouts, the best performing patterns are those with a long-term (more than six months) rise leading to the pattern. | |
| Yearly low | For both breakout directions, the best performing are those with breakouts within a third of the yearly low, but the results are close. | |
| Volume trend | Downward breakouts favor a rising volume trend and upward breakouts show better performance when volume trends downward throughout the pattern. | |
| Breakout | The breakout direction is upward 72% of the time. | |
| Throwbacks and pullbacks | Pullbacks hurt performance. Throwbacks see no performance difference. |
The above figure shows an example of a descending broadening wedge chart pattern. The formation begins at point A. This long and loose descending broadening wedge is typical for this chart pattern type. A partial decline forms at B, and that might be the only redeeming feature of this chart pattern. However, price breaks out upward and reaches the target within a week of the breakout. The target appears as the dashed green line on the chart.
-- Thomas Bulkowski
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