<<i understand you to mean a narrow trading range. if so, isn't this low volatility?>>
Generally, the term "basing" means the stock is forming a platform from which a move can be launched (usually up, unless there is a breakdown, in which case TA practitioners would revise what the nature of the preceding action was). This is *generally* associated with lesser volatility, though volatility does not *define* basing (and so short sharp spikes, and short deep valleys can and do occur).
However, the nature of basing is that it is **concluded** with an explosive, sustained move. As you can see, volatility really doesn't have anything to do with this. First, a stock bases - and yes, lower volatility is *associated* with it, however, all basing comes to an end - at which point it moves explosively. A *sustained* move, even if explosive, is not a sign of volatility. Volatility would be big moves up and big moves down, on and on. Here you have flattish (basing) behavior, followed by a big UP move, without being followed by a big down move - and as such, it does not fall under the definition of volatility.
Morgan |
