Rectangle Patte Bullish

The rectangle graphical price patte serves for existing trend confirmation. The bullish version is usually formed in an uptrend and signals the trend’s direction will prevail after its occurrence on the chart.

Formation

The rectangle patte is characterized by two parallel trendlines representing supportand and resistance levels respectively connecting the most recent lows and highs of the price, holding a certain bunch of price fluctuations within.

Interpretation of Bullish Rectangle

The price climbing above the resistance line (plus certain deviation is possible) is considered a buy signal as the level at which the asset has been repeatedly sold is finally overcome.

Target price

Following a bullish rectangle patte formation the price is generally believed to rise at least to its target level, calculated as follows:

T = R + H,

T – target price;

R – resistance level (patte’s top);

H – patte’s height (distance between support and resistance).