Rectangle patterns are continuation patterns showing indecision in trader’s sentiment about bullish and bearish conditions. Rectangle patterns are reliable patterns since the direction of
the breakout/breakdown is known during the rectangle formation. These patterns are
continuous and follow in the same prior direction (Up or Down) after the pattern formation.
Rectangle formations are bound by two horizontal trend lines, where prices oscillate
between the highs and lows. The prices must intersect these trend lines at least twice
before a breakout or breakdown can result. The volume within the pattern is usually quiet and
increases during the breakout/breakdown stages.