Channeling Stocks – Beautiful Patterns

channeling stock

Are you aware that most stocks channel lots of the time. All you must do is find the channel, then decide where the share price currently is within that channel – and trade accordingly.

Channeling stocks can be uptrending, downtrending, or going sideways. Occasionally the stock may break through the channel, but finally it is drawn back to it.

Channels don’t last forever though. Eventually, the channel will be broken and potentially a new one formed. But until that happens, a channel can last for years and in the meantime, supply you with nice profits. There are long term and in the nice profits.

There are long term channeling stocks using the “Weekly” chart. Having done this, we can now go to our “daily” chart and see where our stock lies within this bigger channel. Is it close to the top or the bottom? Has it bounced off the our “daily” chart and now heading toward the bottom, or vice-versa?

If we want to “trade with the trend” then it is vital to supply a certain answer to these questions. We want to stack the odds in our favor. If the overall ( weekly ) trend is up, we are more likely to have a successful outcome if we trade that way. We wait for the stock to bounce off the base of the channel and then buy into it. Thousands of others will be doing the same way. we want to stay with the herd.

Armed with the above info, we are now in a position to purchase, in this case, shares, or better still, call options at the right time. Why spend thousands on purchasing the stock when you control just as much, if not more, and risk far lesss, by buying the once per week channel were heading downwards, we increase our possibilities a rewarding trade by purchasing put options.

Channeling stocks are particularly strong chart pattern which, if used in mix wth derivatives like options, can supply the trader with a bucket to take to the stock market each week and carry it home full of money.