Sign in to follow this  
Followers 0
Rick

Broadening Formation

1 post in this topic

Broadening Formation

Could be referred to as inverted triangle patterns, as they are formations which start with narrow fluctuations, and then widen with diverging boundary lines.

This is a daily chart of American Eagle Outfitters. The broadening formation is shown by two diverging trendlines and has continued over an eight month time period. Recognizing this formation and using technical analysis can present buy and sell opportunities.

In this case, IQC Zone could confirm the swings between the top and bottom of this formation. IQC Zone is the second indicator from the top, and its signals correspond with the bar colors on the chart. In addition, the tops and bottoms of MACD (the top indicator) could confirm the change in price direction. MACD crossing zero could confirm the current direction.

0

Share this post


Link to post
Share on other sites
Sign in to follow this  
Followers 0