Rectangle pattern. Bullish rectangle. Rectangles are continuation patterns that occur when a price pauses during a strong trend and temporarily bounces between two parallel levels before the trend continues. As with many chart patterns there is a bullish and bearish version. In this lesson, we will show you how to identify the bullish rectangle.

Rectangle pattern

Rectangle Chart Continuation Pattern Tutorial

Rectangle pattern. CHART EXAMPLES OF RECTANGLE PATTERNS. RECTANGLE IN AN UPTREND (BULLISH). Rectangle pattern in an uptrend. The market goes into roughly a three week consolidation before it finds its resolve and pushes higher. There is a general lessening and sort of balance to volume during the formation, but there is.

Rectangle pattern

Rectangles are one of the most reliable chart patterns when they appear in close proximity to support or resistance during an up-trend. This also applies to other short-term patterns such as pennants. Volume should decline during the consolidation and spike up at the breakout. Manage your risk and improve your timing with Colin Twiggs' weekly review of the global markets.

Please enable Javascript to use our menu! Alternatively navigate using sitemap. Perfect Your Market Timing Learn how to manage your market risk. The weekly Trading Diary offers fundamental analysis of the economy and technical analysis of major market indices, gold, crude oil and forex. More than , subscribers - Read it now. We do not spam. In an Up-trend One of the best bull signals you will find is where a narrow rectangle forms immediately below major resistance.

Buying support is strong enough to prevent a retracement and normally it is only a matter of time before a breakout. A rectangle that forms immediately after a breakout, above the former resistance level, is also bullish.

Buyers and sellers are evenly matched, but support is likely to outlast resistance, resulting in an upward continuation.

However, the pattern is more prone to failure: In a Down-Trend A narrow rectangle that forms above support is a strong bear signal. Sellers are preventing a rally and support will most likely fail. A rectangle that forms immediately below a former support level is also bearish, but more prone to failure: Volume Confirmation Volume should decline during the consolidation and spike up at the breakout. The monthly What's New newsletter covers new articles on Trading and the Economy, as well as new software updates.


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