Ascending Channel

A chart pattern created by two upward trend lines which is drawn above and below a price showing resistance and support levels is called Ascending Channel. It is also named as a “rising channel” and “channel up“.
The lower line runs along the lows and it is identified first: it defines the trend line. The upper line (he “channel line”) is identified as parallel to the trendline, running along the highs.
A trend line represents this chart pattern that supports the series of higher lows and a diagonal resistance level connecting the higher highs.
When the price seems to be bounced in the channel in both upper and lower boundaries increases more reversals that make the pattern more reliable.
An ascending channel is same like the Rectangle pattern, but the difference is that an ascending channel  slopes up.

Ascending Channel



An ascending channel is the exact opposite of the descending channel.
Aggressive traders could trade long and/or short at both trend lines looking for a bounce or pullback, when the price is about to reach the bottom trendline.
Waiting for the price to break through either trendline is another way for trading in this pattern.
Astrong buy signal is created by break out above the upper trendline,  while a break down below the lower trendline generates a strong sell signal.
A significant change occurs in the trend, when the price breaks through the trend line (lowe line).
Contrary to it, an acceleration of the existing trend is suggested by breaking through the channel line (upper line),
Remember that channels might be prone to false or premature breakouts like all the other patterns, which means that price may retreat back into the channel.
Ascending channels have an ability to predict overall changes in trends that’s why they are are useful.
Like descending channels, Ascending channels are a tool for determining whether the trend in price will continue.
The upward trend in price can be expected to continue, if prices remain within the ascending channel.
Another strategy of using an ascending channel is to identify where the price fails to reach the upper line.
The failure to reach it often shows trend exhaustion. This may be an early warning that the trend is going to reverse. The breach of the trend line (lower line) may be more likely to happen.
Overall downtrend in prices forms the ascending channels, and represents either a continuation of the trend  or a reversal of the trend.  
Continuation or a reversal is determined by the direction of the break.  

 

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