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In technical analysis, a situation in which the price of a security stays within a fairly narrow band. It is called a rectangle because the resistance price and the support price, when drawn as lines, look vaguely like a rectangle.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
In technical analysis, a chart pattern in which the price of a security bounces back and forth between two horizontal lines. Because a rectangle is thought to occur when stock is being distributed or accumulated by knowledgeable investors, a major price movement is expected once the stock breaks out of the rectangle formation.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.