A worked example that explains the rule, not a stock price. The circle marks the first close beyond the level. The blue line is the target. The orange line is the invalidation. Prices are in the right-hand column, and sessions sit under the volume bar.Hollow green candles closed above their open, and filled red candles closed below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$54.0 · at the close of session 68
Target
61.2$
Invalidation
50.4$
Pattern height
7.2$
Chart span
80 sessions
What it is
A horizontal ceiling and floor between which price bounces repeatedly. A clear balance between supply and demand at two known limits.
When the trigger starts and when it fails
Signal
A session closes outside one of the two boundaries (in the chart: above the ceiling).
BoundariesA horizontal ceiling and floor, with at least two touches on each.
ChopPrice bounces between the boundaries and volume falls the longer the range lasts.
Breakout⚠ Require a session close outside the boundary, not a momentary touch: stop orders sit outside both boundaries, so false breaks are common.
Recognition rules
At least two touches on each of the ceiling and the floor.
Both boundaries are truly horizontal · a slope makes it a channel, not a rectangle.
Volume falls the longer the range lasts.
A breakout on high volume is the event · what came before is chop.
Measuring the target
The height of the rectangle is added to the breakout (or subtracted from the breakdown).
Where it fools you
A long range produces false breaks on both boundaries because stop orders pile up just outside them. Require a session close outside the boundary, not just a momentary breakout.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
━ LevelCeiling and floor
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
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