Expanding Bearish

Developed at Definedge.

Bearish expanding is a four line reversal pattern of the Line break chart.

Series of alternative lines where last line is bearish is marked as bullish expanding pattern.

This is rather a more interesting product of the Line break charts. Three line break expanding pattern is a complex series of four lines.

These are not very common patterns in terms of occurrences and suggests indecision among participants that is resulting in a price noise. Name is expanding because subsequent lines make new highs and lows so patterns looks like traditional expanding formation. Expanding is a difficult phase for trend following methods.

Prashant Shah introduced this concept in a research paper, and his book on the Line-break charts can be found on the Definedge Shelf.

Click here to know more about the pattern.

This pattern can be plotted on the chart by adding it from the study menu in TradePoint & RZone. The pattern is also available in the system builder section. By combining this pattern with other patterns and indicators, you can create your own trading strategies. For any group of stocks and market segments, you can scan and backtest stocks based on those strategies.

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