Rectangle

November 7, 2010

Rectangle PatternRectangle PatternA trading range, a rectangle, or a box is a pattern where the price moves between two horizontal resistance and support lines. A rectangle is usually a continuation pattern which means that a breakout towards the direction of the present trend is likely to happen.

Once in a while, however, a breakout towards the opposite direction of the trend occurs. either way, the prices towards a target that is about the height of the range from the point of breakout.