Category: Money tips Release Date: 2006-01-28
2. Rectangle is the price level by a series of the two changes made between the upper and lower boundaries of the pattern. Stock within its scope appeared on and off. Prices rose to a certain level encounter resistance, slowed down, but soon they get the support of l, but back up to the last the same high point again blocked, and Cuo fall and again during the last low to be supported. These short-term high and low points of each straight line to connect, we can draw the one-channel, this channel is neither on the dump, nor decreased, but parallel development, which is a rectangular pattern.
2. Market implications of a rectangular type of conflict is a battle both sides describe the considerable strength of competition. This pattern clearly tells us that a good light on the scope of the power of both sides to strike a balance between the full state can not be accounted for during this period who who take advantage. Optimistic about the party that its price is a very good buy point, so stock prices fell to that level every time that is bought, forming a level of demand for lines. At the same time, another group of bearish stock market investors have no confidence that the stock price rose more difficult for their level, then rebound in the stock to that price level, as soon as selling, forming a parallel supply line. From another perspective, the rectangle may also be the development of the uncertain market outlook from investors, the investment has become perplexed and confused attitude caused. Therefore, when the stock price picks up again, a group of investors, lack of confidence in the market outlook, exit; and when stock prices fall, a group of investors who look forward to the future prospects added, because both sides of comparable, so stock prices on the back and forth in this paragraph regional fluctuating within. In general, the rectangle is the order form, on and off the leather market, cis-l City and down city may appear long and narrow and the volume at the bottom of a small rectangle in the original more often. After the break down of the limited buying and selling signals, Change rate is usually equal to the width of the rectangle itself.
3. Points to Note (1) rectangular formation process, unless there is unexpected news disturbing, its volume should be decreasing. If the pattern formation period, the high turnover of irregular emergence patterns may fail. When the stock break through the ceiling of the level of the rectangle, it must have with the surge in trading volume; but below the minimum level, not to be a high volume increase. (2) The rectangular showed breakthrough, the stock often Fan Chou, this situation usually break after three days to three weeks there. Fan Chou will be limited to top-line level on the break down after the pseudo-rebound, will be blocked at the baseline level. (3) a high-and low volatility of the larger rectangle than a narrow and long rectangular patterns more powerful.
