Series 3: 6.2.2.3. Channel Lines

6.2.2.3. Channel Lines

Sometimes a trend is characterized by support and resistance levels that trend between two parallel lines: the trend line and the channel line. The channel line is also called the return line. In an uptrend, the lower trend line can be used to initiate new long positions. The upper channel line can be used to take short-term profits on those long positions and to initiate short selling. In a downtrend, the trend line is the upper line, and the lower line is the channel line