DEFINITION of 'Ascending Channel'

An ascending channel is the price action contained between upward sloping parallel lines. Higher pivot highs and higher pivot lows are technical signals of an uptrend. Trendlines frame out the price channel by drawing the lower line on pivot lows, and the upper line is the channel line drawn on pivot highs. Price is not always perfectly contained but the channel lines show areas of support and resistance for price targets. A higher high above an ascending channel can signal continuation. A lower low below the low of an ascending channel can signal trend change.

Ascending Channel or Uptrend

BREAKING DOWN 'Ascending Channel'

Price channels show trend. A trader can trend trade in a channel or swing trade from support to resistance and back to support. In an uptrend, start with the lower trendline drawn on pivot lows and add a parallel channel line to complete the formation.

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