TREND CHANNEL

Technical Analysis. The region between the trend line and the return line for a determined period of time, comprising the movements in stock prices for that period. The return line is parallel to the trend line. In ascending phases, the return line represents the resistance. Alternatively, in descending phases, the return line is the support. The trend channel allows to determine the future trend of prices. As long as prices remain within the channel, traders expect the overall trend not to change. The violation of the trend line is a signal of a reversal in the trend of prices, while a violation of the return line indicates the acceleration of the current behaviour of prices.



Editor:
Bianca GIANNINI
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