A channel describes a chart pattern where the stock price does not move above the top of the channel or below the bottom of the channel for a period of time. The top and bottom of the channel are often horizontal lines called “resistance” and “support”, respectively.
Trade-Ideas is most interested in channels which cover more time and volume but less change in price than expected. These channels are called “consolidation” patterns. This pattern usually happen when the stock’s volatility drops unexpectedly.
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