Option Investor

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A chart pattern showing a fairly narrow trading range over an extended period of time. This can also be viewed as a period when the support and resistance levels come together. During a basing period, the supply and demand levels are close to equal. Investors often view a breakout from the basing pattern as a powerful buy or sell signal (obviously depending on the direction of the breakout). A basing period can also be referred to as a period of consolidation.