Up and Down Channels

This is a channel down pattern. The price action is controlled by two parallel trend lines. Price follows the path of least resistance in a descending channel, which is down. Upon reaching the lower trend line, the stock bounces until it reaches the upper trend line, which acts a resistance. Trading a descending channel in the most effective way is by waiting for an upside breakout to occur before entering.The stock will continue channeling downward until it is able to break either the upper or lower trend line. An upside break is bullish, while a downside break is bearish.
This is a channel up pattern. The price action is controlled by two parallel trend lines. Price follows the path of least resistance in an ascending channel, which is up. Upon reaching the lower trend line, the price bounces until it reaches the upper trend line, which acts as a resistance as well as a profit-taking zone. Trading an ascending channel in the most effective way is through buying dips to the lower trend line for short-term bounce plays, or by waiting for a downside breakout to occur before short selling. An upside breakout from an ascending channel indicates a higher intensity of buying, and is a technical buy signal. A downside breakout from an ascending channel indicates lower prices to come, and is a technical sell signal.