A megaphone is made from two sides
Suppose a share has already risen. Lakshmi marks the high and low of successive completed swings. The highs go ₹105, ₹110, ₹115. The intervening lows go ₹96, ₹92, ₹88. One line through the highs slopes up; another through the lows slopes down. The distance between them grows. Chart readers call this a broadening formation, or a megaphone.
Notice the necessary pair: higher highs and lower lows. Higher highs alone could be an ordinary rise. Lower lows alone could be a decline. Both together describe wider swings. The drawing gives no cause for them and does not tell us whether the next swing will break upward, break downward, or stay inside the widening area.
The word top is sometimes added when this shape appears after a rise. Treat that as a proposed setting, not a completed verdict. A broadening shape can resolve upward too. If the preceding trend is unclear, do not borrow the word reversal just because the outline resembles a megaphone.
Both borders move away
The points are selected swing highs and lows from an illustrative series of completed bars. They are schematic extremes, not equally spaced days. Stop after the third lower low, then reveal two possible later swings.
Only selected highs and lows appear. This schematic omits the bars between them, volume and elapsed time; inspect a full OHLC chart before judging a real formation.
With highs 105 → 110 → 115 and lows 96 → 92 → 88, what is established?
One exceptional session is a different question
A climax is a proposed late burst of activity after an extended move, not a megaphone drawn from several swings. It may be called a buying climax near a rise or a selling climax near a fall. To examine one, compare the latest completed bar's high-to-low range and traded volume with recent comparable bars. Also record the preceding trend and where the bar closed within its range.
Here five illustrative daily bars have ranges of ₹4, ₹5, ₹5, ₹6 and ₹7 and volumes of 90,000 to 1,20,000 shares. The sixth bar spans ₹116 to ₹132, a range of ₹16, on 4,80,000 shares, and closes at ₹130 after an earlier rise. That is conspicuously wide and busy relative to these five days. It may be acceleration. It may be a late rush. Nothing in day six tells us which label tomorrow will deserve.
The large day beside its recent neighbours
Compare day six with the five completed days before it. The candles share one price scale. The volume figures are listed below; candle height alone cannot show how many shares changed hands.
Invented daily OHLC and volumes. Volume is a separate measurement, not something a tall candle proves. The sixth session closed near its high; by itself that is compatible with continued strength.
- Day 6 known
- high ₹132; low ₹116; close ₹130; volume 4,80,000
- Possible day 7A
- close ₹138: the advance continues
- Possible day 7B
- close ₹119: price gives back much of day six
- What day 6 alone settles
- an unusually wide, busy bar after a rise — not a terminal top
Use the right test for the right structure
For a broadening formation, first verify successive highs and lows on a full chart, using completed bars on one fixed timeframe. Draw both borders from points already observed. It helps describe widening swings; it is a poor reason to assume a reversal before either side is resolved. Selected swing points miss all the bars between them, so check the original OHLC chart, news and corporate-action adjustments before drawing conclusions.
For a possible climax, compare the latest range and volume with an appropriate recent window on the same instrument and session basis. Volume on a shortened session or an unadjusted chart around a corporate action can mislead. Then watch what later completed bars actually do: do they keep extending the move, reject the extreme, or settle into a range? Do not name the last bar of a trend while the trend is still unfolding.
Neither structure supplies an entry, stop, position size or measured target. Those belong to the risk plan in Parts 20–21 and to the later pattern lessons 07.05.01–03. If Rahul cannot state what price action would contradict his label, the label is doing no work.