With over five hours of on-demand video, exercises, and interactive content, you will learn how to set price targets and get out of bad trades quickly.] Identify a stock that is under consolidation by watching for three simultaneously occurring properties on a price chart.
The first is that the stock has definable and steady support and resistance levels, much like a flag continuation pattern.
Technical analysts and traders regard consolidation periods as indecisive and cautious.
Obtaining sufficient evidence to support control risk assessments of low for purposes of the financial statement audit ordinarily allows the auditor to reduce the amount of audit work that otherwise would have been necessary to opine on the financial statements.
( Note: In some circumstances, particularly in some audits of smaller and less complex companies, the auditor might choose not to assess control risk as low for purposes of the audit of the financial statements.
The second characteristic is a narrow trading range; be careful, though, because not all stocks and securities have similar volatility. The last feature to look for is a relatively low level of trading volume that does not exhibit major spikes.
Consolidation is neither positive nor negative on its own.
[There are many different chart patterns that can be used to identify areas of consolidation, while others help predict when a stock is likely to breakout higher or lower.