Rectangle in a bottom is a rebound formation that is formed after a long downward trend. A rectangle in a bottom is formed with a gradually increasing volume of each bottom.
A rectangle in a bottom requires at least three bottom levels. Two horizontal trend lines are drawn for a rectangle, a resistance line along the peaks and a support line along the bottoms. The price target of a rectangle in a bottom is the distance between the horizontal resistance line and the horizontal support line measured upward from the horizontal resistance line. A buy signal is generated when the upper resistance line is passed under increasing volume.
