Descending Channel
A downward moving channel formed by two parallel, downward sloping trendlines. The upper trendline connects a stock's highs over a period of time, with each subsequent high price lower than the previous. Conversely, the lower trendline connects the stock's lows, with each subsequent low price lower than the previous.
Investopedia Says:
As a general rule of thumb, the failure of any move within an established price channel to reach one side of the channel usually indicates that the trend is shifting and increases the likelihood that the other side of the channel will be broken. Thus, the clearing of the lower trendline could indicate an accelerating (downward) trend and the clearing of the upper trendline could indicate a decelerating (downward) trend. Related Terms:
Ascending Channel
Channel
Horizontal Channel
Profit-Taking
Range-Bound Trading
Technical Analysis
Technically Strong Market
Technically Weak Market
Trend Analysis
Trendline |