Consolidation is used in technical analysis to describe the movement of a stock’s price within a well-defined pattern of trading levels. Consolidation is generally regarded as a period of indecision, it shows periods when the market is in a flat trend, pausing for directional clues which ends when the price of the asset moves above or below the prices in the trading pattern.

Rectangle/ Ranges are a sort of a flat channel in appearance. It is similar to a double top or bottom which is why it is good to wait for the breakout. The projection is generally the height of the pattern

Triangles tend to trade in a shrinking range about a horizontal axis. You would expect a breakout around 2/3rds of the length. This gives timing clues. Sideways trading through the apex tends to leave prices flat.

CONTINUATION

Continuation is characterised as a consolidation period between sharp moves of similar direction. Continuation patterns tend to be pretty reliable. They follow the direction of the trend with a pause for consolidation. Projections are measured by the original move.

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