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This price pattern is a rare and unusual variation of the triangle. It is a backwards, or inverted triangle which broadens as it forms. In the symmetrical triangles, ascending triangles and descending triangles, the two trendlines eventually converged, not so in the broadening formation. As seen in the graph below, the two lines diverge giving the appearance of an expanding triangle, which is also referred to as a megaphone top.

The volume in this continuation pattern differs from the volume in triangles. In triangles, the volume diminishes as the pattern works itself out. In the broadening formation, the volume expands with the widening price swings. This pattern indicates a market that is out of control and very emotional. It usually occurs at market tops because it represents an unusual amount of public participation, and it is difficult to trade. The broadening formation pattern is usually bearish and appears near the end of a bullish market.

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