Using Channel Lines to Identify Trends

07/20/2015 6:00 am EST

Focus: STRATEGIES

Since channels have a tendency to last for lengthy periods of time, Blake Robben, of Archer Financial Services, outlines how he uses channel line analysis to time his entry and exit points.

Channel line analysis is one of the most valuable tools that I use to identify trend reversals and overbought/oversold conditions. A surge above the upper channel line shows extraordinary strength that can signal the start of an uptrend. Conversely, a plunge below the lower channel line shows serious weakness that can indicate the start of a downtrend. Once an uptrend has started, I use the lower channel to time my buy points. Conversely, in a down channel I use the upper line to time my sell points.  Let us look at some real time examples:

chart
Click to Enlarge

chart
Click to Enlarge

chart
Click to Enlarge

Charts above provided by QST

Using channel line analysis to time entry points can be very profitable since channels have a tendency to last for lengthy periods of time.

By Blake Robben of Archer Financial Services

Related Articles on STRATEGIES