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Chart PatternsC
Channel
A channel forms when price moves between two parallel trendlines acting as support and resistance. Ascending channels slope upward, descending channels slope downward, and horizontal channels indicate range-bound price action. Traders use channels to identify the current trend direction and time entries near the channel boundaries, with breakouts signaling potential trend continuation or reversal.
Example
“The stock traded within a well-defined ascending channel for three months before breaking below the lower trendline.”