rectangle pattern 1. price moves in range on side ways to form a rectangle pattern. 2. as a result , a firm resistance on upper side and support on lower side formed . 3. stock will have either a distribution phase or continuation phase till breakout of resistance or breakdown of support happens 4. an impulsive move at resistance with volume will suggest a breakout for steep , fast movement of the stock to next resistance levels . 5. an impulsive move at at support with volume will suggest a breakdown for steep , fast movement of the stock to next support levels . 6. trade setup : a.buy above resistance of rectangle pattern keeping support levels as stop loss . b.sell below support of rectangle keeping resistance level levels as stop loss . 7. mostly a tussle happens in between resistance & support for good period . and fast breakouts and breakdowns happens 8. usually volume will be dry during consolidation phase of the pattern . volume spike will happen at breakout / breakdown zone for trade confirmations.
for education purpose cadilahc taken one hour time frame .... same applies for all times and tgts too.