A technical analysis tool that depicts the relationship between trading volume and price in a way that both height and width increase substantially. Typically, a power box stands out as an abrupt increase in volume (though it is not necessarily the the box with highest volume on the chart). Power boxes provide credible confirmation of a breakout (stocks break through areas of resistance and support). A narrow box, resulting from light volume, could undermine on the validity of a breakout. The existence of power boxes during a breakout/breakdown is an indication of a high probability of success. The power box results from a sudden burst of exuberance on the upside or fear on the downside.
As shown in the figure above, power boxes come in two different forms: power boxes to the upside and power boxes to the downside.
