Channel Line Types

While trendlines mark rising support in a rising breadth of trading and falling resistance in a falling breadth, channel lines further define a dynamic trend. When a trend moves in a bullish or bearish manner but maintains its breadth of trading, it is exceptional. The controlled volatility of such a move adds strength to the trend; it also provides a method for identifying when the trend is leveling out or likely to reverse.

The channel lines consist of two parallel lines drawn above resistance and below support. The more narrow the breadth and the longer the channel persists, the stronger the trend. Like trendlines, both channel lines are drawn at low and high points and connected. For example, Figure 4.12 shows a rising ...

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