The Channeling Trading Range
When a stock is trading in a defined trading range, it is a “channeling” stock. Thus, a stock’s price may rise or fall in the channel without changing the breadth of trading. However, unlike a flat resistance and support level, both are rising or falling in unison. It is a set of two trendlines moving in the same direction and to the same degree; this is commonly found in stock charts. Channel lines (see Chapter 4, “Trendlines and Channel Lines—The Shape of Things to Come”) are not distractions from the current trend, but strong confirmation that the trend is consistent. As long as it is on the move in the same direction, with the same breadth of trading, and without breakouts in either direction that persist (other ...
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