Basing
a.k.a. Base building
When a price that has been falling stops and moves sideways in a tight range, building a 'base' that may…
In plain English
When a price that has been falling stops and moves sideways in a tight range, building a 'base' that may come before a rise.
Basing is a market catching its breath at the bottom. After a fall, price goes flat for a while, with sellers running out of energy and buyers slowly stepping in.
Traders watch the top of the base as a possible breakout level. A base is just a pause until proven otherwise; price can also slump through the bottom. See also accumulation area.
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