Broadening top
Swings that get larger each time, with higher highs and lower lows, so the lines spread apart like a megaphone.
What it shows
In a broadening formation the highs rise and the lows fall, so the swings widen. It shows rising uncertainty: price is covering more range each time.
It is usually drawn with two lines that spread apart. It is complete only if price closes outside the lines after the last touch.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find at least 3 swing highs that rise and 3 swing lows that fall.
- Draw a line through the highs and a line through the lows.
- Require the lines to diverge: the gap at the end is at least 130% of the gap at the start.
- Mark complete when a close leaves the lines by more than the margin.
Starting values: Touches per line 3; Divergence gap at the end at least 130% of the start; Margin 1.0%. These are proposed and will be tuned on real price data before launch.
How to read it
- Red is the upper line. Teal is the lower line.
- Each swing is larger than the previous one.
- The width of the shape shows how much uncertainty grew.
Status labels you may see
| Label | What it means |
|---|---|
| Widening | Price is inside the lines. |
| Broken up | Closed above the upper line. |
| Broken down | Closed below the lower line. |
What cancels it
A close beyond either line after the last touch ends the shape.
What traders check next
- Whether volume rose with the swings.
- How wide the latest swing is compared with the first.
- Which line price broke through.
Limits
- Hard to trade because the swings are large.
- Rare and uneven.
- Lines are easy to fit to random noise.
Try it in forecastviz
- Open any ticker and choose Reversal patterns → Broadening top in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Right-angled broadening and Diamond top on the same chart.
Questions
Why is it also called a megaphone?
The lines spread outward like a megaphone.
Is it a reversal or a continuation?
It is named a top because it often shows up near highs. We do not claim a direction.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- Murphy, Technical Analysis of the Financial Markets
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.