The rectangle

The rectangle is among the simplest and clearest patterns. It forms when price oscillates horizontally between two parallel support and resistance lines, striking the ceiling and the floor repeatedly without breaking either. It is usually a continuation pattern.

The shape and its formation

It is drawn with two horizontal lines: resistance on top joining equal peaks, and support at the bottom joining equal lows. Price moves between them back and forth in a phase of balance and pause, without changing the general trend. The pattern completes when one of its two sides breaks.