Broadening Formation
Tue, Apr 15A broadening formation is a type of consolidation pattern that serves as a valuable tool for predicting the likelihood of a reversal in the current trend's direction. When this pattern appears during an uptrend, it suggests a near-term reversal in price action rather than a continuation of the upward trend.
This formation arises when price fluctuations create a series of higher highs and lower lows that progressively widen over time. It is typically observed in topping formations, where it reflects the unrealistic expectations of overly optimistic investors.
In contrast to most other consolidation patterns, broadening formations exhibit increasingly wide price ranges and experience significantly higher volatility as time progresses. As the share price rises, trading volume tends to increase, which usually signals a bullish trend. However, in this case, such rallies are often short-lived, and subsequent declines can severely undermine previous support levels, ultimately leading to a collapse.
Recommendation
Backtesting
Backtesting involves applying the rules of a trading strategy or algorithm to a historical dataset, which can span up to 10 years, for a specific asset.
Backwardation
Backwardation occurs in commodity futures markets when the spot price of a commodity surpasses its futures prices. This indicates that the price for immediate delivery is greater than the prices for delivery at future dates.
Bahamian Dollar (BSD)
The Bahamian Dollar (BSD) serves as the official currency of The Bahamas, a nation made up of more than 700 islands situated in the Atlantic Ocean, southeast of Florida.
Bahrain Dinars (BHD)
The Bahraini dinar (BHD) serves as the official currency of Bahrain, a small island nation situated in the Persian Gulf.
Bailout
A bailout is a financial concept that denotes an exceptional act of providing funds, either through lending or outright grants, to an entity (such as a company, bank, or individual) that is at risk of failing due to bankruptcy or insolvency.
Baker Hughes Rig Count
The Baker Hughes Rig Count is a frequently monitored report that tracks the number of active drilling rigs in the oil and gas sector. It acts as a gauge for the vitality of the energy industry, with variations in rig counts indicating changes in exploration and production activities. Founded in 1944 by Baker Hughes (now known as Baker Hughes, a GE company), the rig count has become a crucial measure of drilling activity in the United States, Canada, and global markets. By observing the number of active rigs, the report offers insights into industry trends, production levels, and the overall condition of the energy sector.
