Broadening Right-Angled Descending Chart Example

The chart above of AT&T (T) illustrates a successful broadening right-angled descending pattern with an upward breakout. "Successful" is emphasized because according to Bulkowski's (2005) research, the broadening right-angled descending with upward breakout is the very worst of 23 patterns in performance. Nevertheless, using the two price target formulas, including the typical height of pattern plus breakout price would result in a profit.
This particular chart is interesting for another reason – when prices don't rally back to the opposite trendline from where they just bounced off of, but rather rollover back to the trendline from whence they came, then this can be very suggestive of direction of the breakout. However, the first hint was a false hint when prices rallied off of the downtrend support and moved up halfway before rolling over. Typically, a trader would expect prices to break to the downside, but that did not happen. However, the next hint occurred when price retreated only a third below the overhead resistance; this suggested that buyers were entering far earlier than expected. This bullish expectation was fulfilled when prices broke above overhead resistance and moved higher.