CGNT, Broadening Bottom for NASDAQ:CGNT by tickeron

I found this pattern at tickeron with the following data:
Current confidence to reach target price = 83%
Distance to target price = 26%
Breakout price = 25.59 USD
Target price = 19.16 USD
EMERGED ON = Apr 7, 2021
CONFIRMED ON = Apr 07, 2021


The Broadening Bottom pattern forms when a security price makes higher highs (2, 4) and lower lows (1, 3, 5) following two widening trend lines . The price is expected to move up or down past the pattern depending on which line is broken first. What distinguishes a Broadening Bottom from a Broadening Top is that the price of the security is declining prior to entering the pattern formation.

This type of formation happens when volatility is high or increasing, and when a security’s price is moving with high volatility but or no direction. It potentially indicates growing investor nervousness and a little indecisiveness.

Trade idea

If the price breaks out from the bottom pattern boundary, day traders and swing traders should trade with a DOWN trend. Consider selling the security short or buying a put option at the downward breakout price level. To identify an exit, compute the Target Price by subtracting the pattern height from the breakout point. Pattern height is a difference between patterns highest high and its lowest low.

To limit potential loss when price suddenly goes in the wrong direction, consider placing a stop order to buy back a short position or sell a put option at or above the breakout price.

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