Channel Support and Resistance
Continuing on the theme of support and resistance, Chart 4.6 illustrates the manner in which channels can be created based upon well-established trendlines. The upper boundaries of such channels frequently serve as ongoing resistance lines.
Chart 4.6. Resistance and Support Within Trading Channels
This chart shows the Nasdaq Composite and its movement within the bullish channel that developed between March and August 2003. Line A–B represents the supporting trendline of the advance. The upper boundary of the channel is created to best encompass the majority of peaks of minor moves within the channel. The lower extension is created to match the major channel in depth.
These channels can be ...
Get Technical Analysis: Power Tools for Active Investors now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
