When investors read or hear the term “Brobdingnagian foundation” they may be accepted. “Brobdingnagian” is not only verbal to pronounce, it is a literary reference that may at first glance look unrelated to finance.
But understanding what the term means could be beneficial as some analysts use it to describe potentially huge profit opportunities in markets.
Surrounded in the early 2000s by John Roque, now a technical analyst at Wolfe Research in New York, the term combines two words: one from the world of letters (Brobdingnagian) and the other from the field of finance ( foundation).
In Jonathan Swift’s classic novel “Gulliver’s Travels,” Brobdingnagian describes the inhabitants of Brobdingnag’s fictional country, inhabited by giants. A base, meanwhile, refers to a bullish card pattern where the price of a security or other asset has moved side by side within a specific price range for a period of time.
The longer price action on both sides has progressed, the more likely a subsequent rally is, according to technical analysts, also known as carters, who study on stock price patterns, among other things, to predict where prices are headed. The so-called Brobdingnagian foundations are the ones that have survived for several years and thus signify the potential for a gigantic rally.