the hAnDbook oF teChnICAl AnAlysIs10.3.2 price extensions
A downside extension is any downside retracement that is greater than 100 per-
cent, that is, the downside retracement extends below the previous significant
trough, that is, beyond the observed price range. In similar fashion, an upside
extension is any upside retracement than is greater than 100 percent, that is, the
upside retracement extends above the previous significant peak that is beyond the
observed price range. See Figures 10.7 and 10.8.
10.3.3 price expansions
Generally speaking, an expansion is simply an extension above or below an ob-
served price range. It is a special form of an extension. It is the orientation of the
significant peaks and troughs that distinguishes between an expansion and an
extension.
Figure 10.6 Upside Retracement within an Observed Price Range.
Figure 10.7 Downside Extension beyond a Price Range.