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congestion area

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Financial Dictionary

congestion area

In technical analysis, a horizontal band on a point-and-figure chart resulting from a stock price fluctuation within a narrow price range. Because a congestion area indicates an equality of supply and demand, technicians wait until the stock breaks through the upper or lower bound before committing funds. See also horizontal count.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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