Читать книгу Encyclopedia of Chart Patterns - Thomas N. Bulkowski - Страница 148

What does a broadening top failure look like? Figure 11.3 shows a sharp downward breakout day thrust that pierces the bottom trendline on high volume. Since this is clearly below the lower trendline, and coupled with the failure of price to attain the upper trendline (a partial rise), a downward breakout is at hand.

The downward plunge is like a mountain climber hitting a ledge. Price stalls on very high volume, recovers, and starts climbing again. This is an example of a 5% failure; that is, price breaks out and then moves no more than 5% in the direction of the breakout before moving substantially in the other direction.

Contrast the behavior shown in Figure 11.3 with that shown in Figure 11.4. I include this chart because I have noticed that a large number of broadening formations act this way. Instead of making a clear up or down thrust that pierces the trendline, price moves horizontally for months before finally closing above or below the formation highs or lows.

In this case, price declined below the low in early July and halted (the last trendline touch at pattern's end). Price climbed for a bit then receded again and reached a new low in early August. It looks as if price vaulted over the August volume spike.

Another recovery saw price rise no higher than 44 for about half a year before finally staging an upward breakout. The breakout happened when price closed above the top of the chart pattern. The sideways move isn't a 5% failure, but it tries the patience of traders waiting for something to happen.

Figure 11.4 Price in this broadening top moved horizontally for 6 months before staging an upward breakout. This horizontal movement is a common occurrence with broadening tops.

Table 11.2 General Statistics

Description	Bull Market, Up Breakout	Bear Market, Up Breakout	Bull Market, Down Breakout	Bear Market, Down Breakout
Number found	1,215	200	804	205
Reversal (R), continuation (C) occurrence	100% C	100% C	100% R	100% R
Average rise or decline	42%	25%	–13%	–22%
Standard & Poor's 500 change	12%	–1%	–2%	–11%
Days to ultimate high or low	253	91	56	37
How many change trend?	52%	41%	23%	45%