Price Channel Pattern

Learn to recognize and trade bullish, bearish and horizontal price channels through interactive charts.

What is a price channel pattern?

A price channel occurs when price becomes bounded between parallel support and resistance lines. These trendlines can point up, down or even horizontally.

Bullish channel examples:

• SPDR Energy Select Sector (XLE) Bullish Channel stocks
• GBPUSD Bullish Channel forex

Bearish channel examples:

• Peloton (PTON) Bearish Channel stocks
• Antero Resources (AR) Bearish Channel stocks

Horizontal channel examples:

• Hilton (HGV) Horizontal Channel stocks
• Ocado Group (OCDO) Horizontal Channel stocks

Download our free chart patterns PDF for a guide to 20 classical chart patterns with over 100 interactive charts, also on TradingView.com.

Price channel duration

A price channel can occur over various time frames.

Price channel characteristics

A price channel is defined by two parallel support and resistance lines.

1. Support is called the 'main trendline' and resistance is called the 'channel-line' in the case of an upward sloping price channel. The reverse applies in the case of a downsloping price channel.
2. The more price points a trendline connects, the stronger its predictive power.
3. Trendlines built over weeks or even months have stronger validity.

Trading volumes

A price channel has no volume requirements.

Bullish price channel trading

If you expect the price to continue fluctuating up between these parallel lines, you could buy at the main trendline (support), with a view to sell higher at the channel-line (resistance). Alternatively, you could open a long position and benefit from the rise in price without actively trading the market.

Bearish price channel trading tips

If you expect the price to continue fluctuating down between these parallel lines, you could sell at the main-trendline (resistance) with a view to buy lower at the channel line (support). Alternatively, you could open a short position and benefit from the fall in price without actively trading the market.