Consolidation

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Consolidation has two meanings in the financial world.

1. The merger or union of two or more separate companies or other entities.

2. In technical analysis, the movement of an asset's price within a defined pattern or barrier of trading levels. Consolidation is generally regarded as a period of indecision, which ends when the price of the asset breaks beyond the restrictive barriers. Periods of consolidation can be found in charts covering any time interval (i.e. hours, days, etc.), and these periods can last for minutes, days, months or even years. Lengthy periods of consolidation are often known as a base.