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Rick

Horizontal Trend Channel

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Horizontal Trend Channel

If connecting the price tops of a particular stock or index compose a horizontal line parallel to a line connecting the bottoms of that stock or index, the Horizontal Trend Channel is the area between the two lines.

The daily stock prices of Sun Microsystems formed a horizontal trend channel in the latter half of 1998. The significant event is when the price ultimately breaks the upper line of the channel, and the stock price goes up twenty points over the next three weeks, and has continued an uptrend to almost $110 in late January, 1999.

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