The breakout has occurred, so the question is whether the stock can
extend the move.
The formation usually occurs after
an extended move up or down where price «coils» before eventually breaking out.
Often recognized as a reversal pattern that occurs after
an extended move up or down where the price action «fans out» from the starting point.
A bullish engulfing bar typically forms after
an extended move down.
It's most common after
an extended move higher or lower.
Likewise, range expansion can be either brief in nature or
an extended move.
It represents a market's tendency to move back to the average price after
an extended move.