3 Weeks Tight Chart Pattern
The 3 Weeks Tight chart pattern is best viewed on a weekly chart since you compare the closing share price at the end of each week.
A 3 Weeks Tight chart pattern is considered a bullish continuation pattern. This pattern usually leads to upside price gains upon breaking out.
This pattern develops after the stock has been in an uptrend and decides to take a break. However, larger investors and institutional investors do not see a need to sell any shares, even after the share price has moved up nice already. On the flip-side, these larger type investors anticipate even higher prices still. As such, they use any weakness in the share price to add to their holdings.
In order for this pattern to develop, the share price needs 3 straight weekly closes where each closing share price is no more than 1% to 1.5% higher or lower than the previous week's closing price. It feels as if the share price is "doing absolutely nothing" during the 3 weeks time that it takes the pattern to develop......
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