Broadening Formation
Requires ConfirmationA bilateral "megaphone" pattern in which each swing high is higher and each swing low is lower than the one before — the trading range expands rather than contracts, the opposite of a triangle.
Candlestick chart with swing highs getting progressively higher and swing lows getting progressively lower, forming an expanding megaphone shape, followed by a breakdown below the lower diverging boundary.
Sample data — illustrative only, generated to demonstrate this pattern's shape. Not a real security.
Identification Criteria
- At least five alternating touch points: typically three on one trendline and two on the other, or vice versa.
- Each new high exceeds the prior high, and each new low undercuts the prior low — a genuine expansion of volatility, not noise.
- The two trendlines diverge outward rather than converging, giving the pattern its megaphone shape.
- Volume commonly rises as the pattern widens, reflecting growing disagreement between buyers and sellers.
- Often appears after an extended trend, near a potential market top or bottom, as late participants pile in on both sides.
Formation Logic
The expanding range reflects an increasingly emotional, poorly controlled market — neither buyers nor sellers can hold a level, and each side pushes the price further than the last swing. This is commonly read as a sign of an unstable, late-stage move rather than the orderly consolidation seen in a converging triangle.
Breakout / Confirmation Rule
Confirmation requires a decisive close beyond either boundary, ideally on a volume shift. Because the range is expanding rather than contracting, false breakouts and whipsaws are meaningfully more common here than in narrowing patterns — waiting for a sustained close is especially important.
Measured-Move Price Target
A commonly used, purely illustrative technique: measure the height of the formation at its widest point, then project that distance in the direction of the eventual breakout. Given the pattern's inherently higher volatility, treat this as a rough guide rather than a precise level.
Common Pitfalls
- Widely considered one of the least reliable classical patterns — expanding volatility makes stop placement difficult and whipsaws frequent.
- Early swings can be indistinguishable from ordinary choppy, directionless price action until the expanding shape becomes clear.
- Like the symmetrical triangle and rectangle, this pattern is bilateral by definition — guessing the breakout direction in advance is not supported by the pattern itself.