A channel is two parallell trendlines, which are drawn along the lows and the highs. The upper line connects a series of highs and the lower trendline connects a series of lows. The channel can go upwards, downwards or sideways. Note that the upper and lower trendline should be parallell. If the stockprice breaks the channel, the investor can expect a strong movement in the stock price in the direction of the break.
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