Ascending and descending channels
An upward or downward channel formed by drawing a parallel line along a support or resistance line is often referred to as an ascending or descending channel. The trend is the basis for long and short positions, while the rising and falling channels are the basis for closing and holding positions. The longer the channel line is not broken and the more it is tried, the more important it is to be seen as a trend line, while when an important trend line is broken, it indicates that the trend may turn. However, the important channel line is broken, which may be the upward and downward trend that begins to accelerate, which is the basis for increasing the number of empty shots; similarly, we can also use the price level to be powerless to touch or break through, and use the channel line to judge whether the trend is increasing or weakening, and pay attention to its trend changes.
What is the Share Price Channel?
The stock channel is a continuation trend pattern, its slope tends to be upward or downward, and its price transactions are concentrated within the upper or lower trend line. The upper trend line is a resistance line, while the lower trend line is a support line. When there is an upward trend in the price channel, it is seen as an upward trend, and when the price channel appears in a downward trend, it is seen as a downward trend.
Along with the price channel formed by the two trend lines, the main trend line determines the final trend, and the other trend line becomes the channel line, which is in a parallel relationship with the main trend line. If the ascending (falling) channel is tilted upwards (downwards), at least the pattern should be maintained by connecting the lows (highs) of the channel into a line.
When the price continues to rise and fluctuates within the channel range, the bull market thinking operation should be maintained. When the price continues to fall and fluctuates within the channel range, the bear market thinking operation should be maintained.
In the process of investors participating in market operations, they should not be unfamiliar with the upward channel of stock prices, and there will be many ways to use the upward channel. When the stock price is running in an upward channel, it is generally the market maker who uses the principle of high selling and low suction to open a position near the lower rail of the stock price and start to suppress the stock price near the upper rail, so as to create the stock price to maintain the operation of the rising channel. In the end, the stock price will accelerate upward or accelerate the downward trend, investors can choose to break through the upward channel stock operation, avoiding the risk of falling below the downward channel.
Practical cases