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  • Appears in a down trend or an uptrend
  • Formed as a short, sloping or non-sloping, rectangle bounded by a pair of parallel trend lines
  • Usually appears after a pole formation, which is a steep move up or down of stock prices
  • Characterized as a temporary pause or a correction of stock prices before continuing its prior trend
  • Volume is decreasing
  • Effect 1: Stock prices continue going up if the prior pole formation is an uptrend
  • Effect 2: Stock prices continue going down if the prior pole formation is a downtrend
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