Consolidation formations

Consolidation formations are formations or patterns that are formed in a consolidation phase. The share price moves sideways when it is in a consolidation phase.

Consolidation formations are formed in consolidation phases when the volatility of the stock price drops, the price curve shrinks. Consolidation formations can induce severe consolidation outbreaks because low volatility usually is followed by high volatility. Examples of consolidation formations are symmetrical triangles, right-angled triangles, rectangles and short-term wedges.