Basing

AAA

DEFINITION of 'Basing'

A period in which a stock or other traded security is showing little in the way of upward or downward movement. The resulting price pattern is a flat line. Often, 'basing' is a term used by technical analysts to describe an issue that is consolidating after a period of rapid growth or decline. A basing stock is one with equal amounts of supply and demand.

Basing

INVESTOPEDIA EXPLAINS 'Basing'

Basing is a common occurrence after a stock or the market has been in a lengthy decline or has increased by a large amount. In other words, the market is taking a break. Some stocks can form a base that lasts for severals years before the trend is reversed.


A basing stock is also thought to be one that is forming new lines of support and resistance. In essence, basing is the merging of previous lines, which leads to the formation of different ones. Many technical analysts believe that basing is crucial, especially for surging stocks. They view basing as the "breather" that allows the issue to continue climbing.

RELATED TERMS
  1. Index

    A statistical measure of change in an economy or a securities ...
  2. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  3. Trend

    The general direction of a market or of the price of an asset. ...
  4. Sideways Trend

    Describes the horizontal price movement that occurs when the ...
  5. Forex Spread Betting

    A category of spread betting that involves taking a bet on the ...
  6. Money Flow Index - MFI

    A momentum indicator that uses a stock’s price and volume to ...
Related Articles
  1. Spot Hotshot Penny Stocks
    Investing

    Spot Hotshot Penny Stocks

  2. Triangles: A Short Study In Continuation ...
    Active Trading Fundamentals

    Triangles: A Short Study In Continuation ...

  3. Basics Of Technical Analysis
    Trading Strategies

    Basics Of Technical Analysis

  4. The ADX Shows Strong Uptrends In These ...
    Chart Advisor

    The ADX Shows Strong Uptrends In These ...

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center