Basing
A chart pattern showing when demand and supply of a product are almost equal, resulting in a narrow trading range and the merging of support and resistance levels.
Related terms
Support
A price level where a market tends to encounter buying pressure and struggles to fall below, formed when buyers repeatedly step in at the same point. Technical analysts chart support alongside resistance to understand market trends and identify potential reversal points.
Read full definitionResistance
A price level where a market tends to encounter selling pressure and struggles to rise above, formed when more traders repeatedly sell than buy at that point. Identified through technical analysis, resistance levels mark potential reversal points.
Read full definitionConsolidation
A period of range-bound activity after an extended price move, in which a market neither continues nor counters the longer-term trend.
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Bar Chart
A chart type built from four significant points: the high and low prices, which form the vertical bar; the opening price, marked with a horizontal line to the left of the bar; and the closing price, marked with a horizontal line to the right.
Read full definitionBollinger Bands
A technical analysis tool consisting of a band plotted two standard deviations either side of a simple moving average, used to find support and resistance levels.
Read full definitionCandlestick Chart
A chart type used to analyse a market’s price. Unlike bar charts, candlestick charts show the market’s high, low, open and closing price within each period.
Read full definitionChartist
A trader who analyses a market’s price history to determine future price trends, using a range of analytical tools and indicators to conduct technical analysis on a price chart.
Read full definitionCup and Handle
A technical analysis pattern named for its resemblance to a tea cup: a shallow, rounded saucer with a downward-trending handle extending from the right-hand side. The formation can occur over anything from several weeks to an entire year.
Read full definitionDivergence
When a security’s price deviates from a technical indicator, for example the indicator signals bullish conditions while the price falls, or signals bearish conditions while the price rises.
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