Consolidation Primary Trend with Failed Breakouts
The price patterns and secondary trends in a long-term primary consolidation trend can be confusing. The temptation is to assign great value to strong but short-term price movements when, in review of a longer time span, some types of movements take on a character other than specific trends. These interim movements in price may represent failed breakouts from the range-bound trend, and not new trends in their own right.
For example, Figure 15.9 contains a series of strong price movements ranging from $10 down to $5 over a period of two years. The appearance of this chart is one of high volatility; however, when analyzed for the repetitive nature of price movement, a different picture emerges. ...
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