Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 119

How do you find an ascending broadening formation? To answer the question, read the selection guidelines outlined in Table 9.1. Microscopes or telescopes are optional. While chewing on the table, look at Figure 9.3, an ascending broadening formation on the weekly scale.

Table 9.1 Identification Guidelines

Characteristic	Discussion
Appearance	Looks like a megaphone with the base of the formation horizontal and bounded on the top by an up‐sloping trendline.
Horizontal bottom support line	A horizontal, or nearly so, trendline that connects the minor lows.
Up‐sloping top trendline	An up‐sloping trendline bounds the expanding price series on top.
Touches	Look for at least five trendline touches, three on one trendline and two on the other.
Whitespace	Price should bounce from trendline to trendline, overwriting whitespace from the pattern.
Price action before breakout	Price sometimes moves horizontally for many months before moving outside the formation high or low.
Breakout direction	Price can break out of the pattern in either direction, but favors an upward breakout.
Volume	Trends upward most often.
Support and resistance	Follows the two trendlines into the future.

Figure 9.3 Support and resistance areas on a weekly time scale. They appear along the trendline axis and can extend far into the future, as in this case.

Appearance. The overall shape of the formation looks like a megaphone with the bottom of it horizontal.

Horizontal bottom support line. The bottom of the pattern follows a horizontal trendline while an up‐sloping trendline bounds the top. Look for price to come close to or touch the trendline at least twice in distinct minor lows.

Up‐sloping top trendline. Price should touch the top trendline at least twice, in two minor highs.

Touches. Price should come near to or touch each trendline in minor highs or minor lows. At least five touches are needed to qualify the pattern, but be flexible. Don't count it as a touch when price slices through a trendline. That often occurs at the start and breakout from the pattern. If price doesn't touch a trendline at a minor high or minor low, then it doesn't count as a touch.

Whitespace. Price should bounce across the pattern from top to bottom frequently, filling the whitespace with price movement.

Price action before breakout. In some ascending broadening formations, price moves sideways for many months while trying to decide on a breakout direction. Eventually, price rises above the formation top or slides through the bottom trendline and stages a breakout.

Breakout direction. The breakout favors an upward direction, but it's almost random. A breakout occurs when price closes outside the trendline boundary.

Volume. The volume trend is usually upward. Don't discard a chart pattern because volume trends in a direction different from what you expect.

Support and resistance. I chose Figure 9.3 because it shows the two common areas of support and resistance. These areas follow the trendlines. Along the base of the formation projected into the future, the support area repels the decline over 2 years after the formation ends. The rising trendline tells a similar tale; it repels price three times nearly a year later.

The implications of this observation are profound. If you own a stock and it is breaking out to new highs, it would be nice to predict how high price may rise. One way to do that is to search for formations such as this one. Many times, extending the trendlines into the future will predict areas of support and resistance.

Although the trendline did not predict the absolute high, it did suggest when price would stall. The resistance area turned out to be a good opportunity to sell the stock.