What's Consolidation?

Stock Price consolidation in stock trading is when stock prices stop moving upwards or downwards in a stock trend and begin to move sideways in what is known as a consolidation.

Stock Price will continue to consolidation and move sideways for a period of time until such a time that one side of the stocks market - either the buyers or the sellers gain control of the stocks market and either push stock prices upward in an upward stock trend or push stock prices downward in a downward stocks trend.

Consolidation Stocks Trading Patterns

Symmetrical triangles are stocks chart patterns with converging stock trend lines that form a consolidation period and are used to trade the stocks price consolidation.

Technical buy point from a symmetrical triangle is the up-side break of stocks price consolidation, while a down-side break of the stocks price consolidation is a technical sell stock signal. Ideally, a market breaks out from a symmetrical triangle prior to reaching apex of the triangle.

When these stocks price consolidation patterns form we say that the Stock Trading market is taking a break before deciding which is the next direction to take.

What is Consolidation in Stock Trading? - What is Stock Price Consolidation in Stock Trading?

However, this stocks price consolidation pattern cannot go on forever & just like in a tug of war one side eventually wins, below are two examples of how stocks price consolidation eventually had a breakout pattern and moved in one specific direction.

Stock Price Breakout Downward Sell Stock Signal after a Consolidation - What's Consolidation in Stock Trading?

Stock Price Break Out Upward Buy Stock Signal after a Consolidation - What's Consolidation in Stock Trading?