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Rectangle (Continuation) - ChartSchool - StockCharts

# Rectangle (Continuation) - ChartSchool - StockCharts -...

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18/2/2014 Rectangle (Continuation) - ChartSchool - StockCharts.com 1/4 StockCharts.com - ChartSchool Learn more about Technical Analysis and Charting Terminology You are here: StockCharts.com » ChartSchool » Chart Analysis » Chart Patterns » Rectangle (Continuation) Advertisement Rectangle (Continuation) A Rectangle is a continuation pattern that forms as a trading range during a pause in the trend. The pattern is easily identifiable by two comparable highs and two comparable lows. The highs and lows can be connected to form two parallel lines that make up the top and bottom of a rectangle. Rectangles are sometimes referred to as trading ranges, consolidation zones or congestion areas. There are many similarities between the rectangle and the symmetrical triangle . While both are usually continuation patterns, they can also mark trend significant tops and bottoms. As with the symmetrical triangle, the rectangle pattern is not complete until a breakout has occurred. Sometimes clues can be found, but the direction of the breakout is usually not determinable beforehand. We will examine each part of the rectangle and then provide an example with MU.

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18/2/2014 Rectangle (Continuation) - ChartSchool - StockCharts.com 2/4 1. Trend: To qualify as a continuation pattern, a prior trend should exist. Ideally, the trend should be a few months old and not too mature. The more mature the trend, the less chance that the pattern marks a continuation. 2. Four (4) Points: At least two equivalent reaction highs are required to form the upper resistance line and two equivalent reaction lows to form the lower support line. They do not have to be exactly equal, but should be within a reasonable proximity. Although not a prerequisite, it is preferable that the highs and
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• Spring '12
• RamonBrunoTulibasJr.
• Breakout, Technical Analysis and Charting Terminology

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