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The Right-Angled Ascending Broadening pattern has a flat bottom support line and an upward-sloping resistance line, creating a megaphone shape that expands upward. Despite the ascending top, this pattern is typically bearish — it breaks down more often than it breaks up.
The flat support shows a consistent floor, while the rising tops show increasingly wild upside swings. This expanding volatility is a sign of growing uncertainty, and the eventual breakdown through the flat support catches trapped longs off guard.
Bulkowski's data shows downward breakouts are more common and more profitable for this pattern, making it a counter-intuitive but statistically significant bearish formation.
The flat support creates a false sense of security. Traders see price bouncing off the same level repeatedly and assume it will hold forever.
Meanwhile, the rising highs show increasing speculation. Each rally is more extreme, attracting more FOMO buyers. The expanding range is a sign of instability, not strength.
When support finally breaks, it catches everyone by surprise. The dip-buyers who relied on that floor, the breakout traders who chased the rising highs — all are trapped. The liquidation cascade drives a sharp move down.
Short on breakdown below the flat support line with volume confirmation. Alternatively, short at the rising resistance with a tight stop above.
Above the most recent high (if shorting the breakdown) or above the resistance line with buffer.
The height of the pattern at its widest point, projected downward from the breakdown.
Typically 1:2 or better given the wide pattern range.
Don't let the rising highs fool you — this pattern breaks down more often than up. The expanding volatility is a warning, not a sign of strength.
When you see a flat bottom with expanding upside swings, don't chase the highs. Wait for the support break — that's where the real move starts.
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