These alerts describe a consolidation breakout pattern.  This pattern starts when a stock price moves only a small amount for a sufficient amount of time, creating a “consolidation” pattern.  We first report an alert when the stock price moves outside of the range of the consolidation pattern.  If the price continues to move in the same direction, and it moves quickly enough and far enough, we will report additional alerts.

These alerts describe the same general pattern as the channel breakout and channel breakdown alerts.  However, these alerts use more traditional methods of analysis, and may be easier to see on a stock chart.  For one thing, each of these alerts works on one specific time frame, where the channel breakout/breakdown alerts automatically look at a wide range of timeframes.  Also, these alerts pay more attention to time, and very little attention to volume.  Finally, these alerts do not require any confirmation; a single print can create an alert.

To see these alerts clearly, configure your stock chart to show candlesticks.  And show exactly 41 periods in the chart.  This pattern will be visible on other charts, but it will be easiest to spot on a chart configured in this way.

Our definition of a consolidation removes any stock with empty candles.  If a stock hasn’t traded at all in some time, that does not count as a consolidation pattern.  Each candle in the consolidation must contain at least one print.

More options related to these alerts are listed below.