Rectangles

A Rectangle is a continuation pattern in trading in which the price of a financial instrument fluctuates within the range of a top and bottom limit by horizontal lines. Rectangle reflects a consolidation period that helps traders identify support and resistance levels. Traders will buy the financial instrument at that price when it hits the bottom line, while traders will sell the financial instrument at that price when it hits the top price.

The trend will be continued most likely if the breakout occurs, otherwise, a reversal pattern will be followed, resulting in a downward trend.