After the price has risen significantly in short period of time (mostly after breaking out into new high ground) then consolidate in tight area and create rectangle type fo formation. That is a flat base
In flatbase stock normally trade Sideways to "Digest" Earlier Gains
stocks will often break out of a cup with handle or double bottom pattern, run up at least 20%, then trade essentially sideways to form a flat base
Price range will usually remain fairly tight throught the base. which meean institutional investors who have to buy large positions are quietly buying withint a certain price range. that's how they increase their holding without increasing their price range
flat bases also have a way of shedding weaker holders. flat base shakeout is more of a slow grind. the weaker, less commited investors just get worn out by the indecisive, sideways action and eventually lose patience and sell.
