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Are megaphone patterns bullish or bearish?

Megaphone patterns might be bullish or bearish depending on the trend before it. If the stock is experiencing a bullish (upward) trend when the megaphone pattern begins, it's called a megaphone bottom. If the stock is experiencing a bearish (downward) trend when it begins, it's called a megaphone top.

What is a bearish megaphone pattern?

If the stock experiences a bearish trend (downward movement) when the megaphone chart pattern begins, it is called a bearish megaphone pattern or megaphone top. This pattern usually leads to a breakout downwards, below the lower trend line. Thus, it verifies the persistence of the current bearish momentum.

Is a megaphone bottom a bullish signal?

Even though a megaphone bottom is considered a bullish signal and can still continue to the downside. Megaphone patterns can make a great swing trade especially if you’re grabbing monthly option contracts. By grabbing monthly contracts, you can capitalize on the new higher highs or lower lows of the broadening formation.

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