Channel Line

Channel Line

Straight Lines drawn parallel to the basic trendline. In an uptrend, the channel line slants up to the right and is drawn above rally peaks; in a downtrend, the channel line is drawn below price troughs and slants down to the right. Prices will often meet resistance at rising channel lines and support at falling channels.

Source: Murphy, John. Technical Analysis of the Financial Markets; (c) 1999.

The following chart shows a downward sloping channel.

downward_sloping_channel

 

 

 

 

 

 

 

 

 

 

Source: Charts created by Bloomberg LP.  All rights reserved. Click here for more information on Bloomberg.

The following chart shows a downward sloping channel with a target.

downward_sloping_channel_with_target

 

 

 

 

 

 

 

 

 

 

Source: Charts created by Bloomberg LP.  All rights reserved. Click here for more information on Bloomberg.