Expanding Triangle | Broadening Top on Goldman Sachs
In light of a spate of downgrades and the resulting carnage today in the financial sector of the market I thought I would look at some the constituent’s charts. One really stuck out to me — that of Goldman Sachs (NYSE: GS).
The chart stood out for a couple of reasons:
- GS has been significantly outperforming its peers
- The GS chart appears to be developing an Expanding Triangle or broadening top
Converse to a the more common contracting triangle where the price range consolidates as time passes, a expanding triangle is illustrative increasing volatility as the hard right edge of the chart pushes onward. It is a relatively rare technical pattern.
In doing some research I came across the following information on expanding triangles:
The expanding triangle, which is also known as a broadening top, usually consists of three peaks, each higher than the previous peak, and two valleys, the second lower than the first.
Sometimes called the broadening formation, this pattern often occurs at market top.
I think the above interpretation of the expanding triangle is sufficient, so on to the chart of GS.
Notice the distinct pattern of three peaks and two valleys. Not much else to say beyond the chart of Goldman Sachs lining up to be a text book example of a expanding triangle / broadening top. Only the future knows whether the pattern will mark a top for GS.
Comments are closed.
