What is a flat base pattern?
The flat base pattern is a continuation pattern. After a large uptrend prices can turn very flat. In this pattern prices will remain at relatively the same level for an extended period of time. Eventually the stock price should break to a new high. The breakout would offer a buy signal. It may take months to form.
Target While there is no set target for this pattern, the breakout should cause a giant movement. A 60% increase from price is a normal expectation. Volume Volume should be relatively small during the formation of the flat base pattern. High volume on the breakout is a good sign to look for. Trading the pattern A professional trader may decide to buy this stock on the breakout and place a stop under the old resistance level.
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