A bull trend is formed when demand exceeds supply and a bear trend occurs when sellers overpower the buyers. When the bulls and bears hold their ground without budging, it results in the formation of a trading range.
Sometimes, this leads to the formation of a rectangle pattern, which can also be described as a consolidation zone or a congestion zone. Bearish and bullish rectangles are generally considered to be a continuation pattern but on many occasions, they act as a reversal pattern that signals the completion of a major top or bottom.
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