Flat base
After a rise, price moves sideways in a narrow band for several weeks.
What it shows
A flat base is a pause with little movement. Price stays within a narrow band, usually under 15% deep, for five weeks or more.
It describes a stock that is holding its gains rather than falling. The pattern is complete when price closes above the top of the band.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find a rise before the base.
- Find a period of at least 25 bars where the highest high and lowest low are less than 15% apart.
- Draw the top and bottom of the band.
- Mark complete when a close rises above the top of the band.
Starting values: Minimum length 25 bars; Maximum depth 15% of price. These are proposed and will be tuned on real price data before launch.
How to read it
- The shaded box is the base.
- The dashed line is the top of the base.
- A tighter base has a smaller box.
Status labels you may see
| Label | What it means |
|---|---|
| Base forming | Price is inside the band. |
| Broke the top | Closed above the band. |
| Broke the bottom | Closed below the band. |
What cancels it
A close below the bottom of the band.
What traders check next
- How tight the base is.
- Volume inside the base.
- The size of the rise before it.
Limits
- Many sideways periods look like flat bases.
- Rules for depth and length are choices.
- A break can fail.
Try it in forecastviz
- Open any ticker and choose Continuation patterns → Flat base in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Rectangle and Cup and handle on the same chart.
Questions
How is it different from a rectangle?
A flat base is a specific kind of narrow rectangle after a rise.
How long should a base last?
We require at least 25 bars. Longer is not necessarily better.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- O'Neil, How to Make Money in Stocks
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.