Rectangle pattern in candlestick chart

A rectangle is a common consolidation pattern, often appearing as a pause within a trend, indicating price oscillations within a certain range while awaiting a breakout direction. It consists of two parallel horizontal lines, resembling a "rectangular box."

Pattern Composition:

• Upper Resistance Line: Connects multiple price highs, forming a horizontal resistance level.
   
• Lower Support Line: Connects multiple price lows, forming a horizontal support level.
   
• Characteristics: Prices oscillate repeatedly between the upper and lower lines, with relatively stable volatility.

Trading Signals:
Breakout above the upper resistance line: Indicates strengthening bullish momentum, potentially continuing the uptrend, serving as a potential buy signal.
Breakout below the lower support line: Indicates bearish dominance, potentially continuing the downtrend, serving as a potential sell signal.
The breakout direction determines the subsequent trend.

The rectangle represents a market "resting" phase—remain patient before the breakout and monitor trading volume and direction.

"This article is for educational purposes only and does not constitute investment advice."