Equilibrium Pattern
In technical analysis, an equilibrium pattern occurs when the market has set a high, a low and then begins trading within an ever-tightening trading range within these two levels.
To do this it has to start setting progressively higher-lows and lower-highs. As the range between the highs and the lows continues to tighten it reaches an equilibrium point beyond which it will either break bullish or bearish.
Equilibrium patterns are a good indication that a break is coming, although they cannot tell you the direction of the break. For this, you must keep an eye on whether the price action begins breaking above the lower-highs or below the higher-lows.
