Sometimes before a leading stock takes off on a new advance, the price action will calm and tighten into a narrow range, almost as if it were crouching for a big leap. That trait defines the flat base. The flat base can run as short as six weeks. Kaltbaum also likes flat bases because they can give clearer buy and stop-loss signals than wider and looser patterns like double bottoms.
More volatile stocks can trick investors.
You could decide to buy a stock as it breaks above a certain price, or pivot point. The stock does so, and you jump in. But this price action turns out to be a mere spasm, not a meaningful breakout on the way to a long advance. The share price promptly falls back after drawing you into the shares. With a flat base, moves above the base, or failures below it, stand out bright as day.