Chart Patterns
Broadening Formation (Megaphone)
Two trendlines diverge instead of converging, higher highs and lower lows both widening at once, a sign of rising volatility and indecision usually read as bearish late in an uptrend.
Call each swing, watch the megaphone open
The chart reveals one new swing point at a time. Every time a fresh high or low prints, decide whether it actually extends past the same-side swing before it. Confirm it if it does, skip it if it does not. Each correct confirm updates the widening-ratio gauge below with the real distance between the emerging upper and lower lines.
Click "Reveal next swing" to begin.
Waiting for swings to reveal.
How it works
- Every new swing has to clear the same-side extreme before it. The third high has to sit above the first high, the second low has to sit below the first low, and so on. Anything that fails to clear its predecessor gets rejected by the tool's own math, whether you clicked confirm or not.
- The widening ratio is the envelope's final width divided by its starting width. Starting width is the gap between the first confirmed high and first confirmed low. Final width is the gap between the last confirmed high and last confirmed low. A ratio near 1.0 means the range never really expanded, it just wandered.
- Both lines have to actually diverge, not just widen on one side. The tool fits a straight line through the confirmed highs and another through the confirmed lows, using the first and last confirmed point on each side, then checks that the high line's slope is positive and the low line's slope is negative. One-sided expansion, where only the highs are climbing while the lows stay flat, does not count as a megaphone.
- Confirmation needs a widening ratio of at least 1.35 on top of both slope conditions holding. Below that, the shape reads as an ordinary choppy range that happens to have a couple of larger bars in it.
Where this breaks
A widening range says volatility is rising, it does not say which way price resolves
The megaphone shape only measures expansion, the growing distance between the highs line and the lows line. It carries no information about direction on its own, the bearish-late-in-an-uptrend read comes from context outside the pattern, not from the pattern itself. A confirmed broadening formation can just as easily resolve up through the upper line as down through the lower one, and because both lines are moving apart, a breakout in either direction tends to be larger and faster than a breakout from a tightening pattern like a triangle, which makes the eventual move harder to size a stop against. Traders who treat the megaphone as an automatic short setup are betting on the historical tendency, not on anything the widening ratio itself actually proves.