Ascending Channel
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Ascending Channel
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An ascending channel is a chart pattern where the price moves upward within two parallel rising lines.
The lower line (support) connects higher lows
The upper line (resistance) connects higher highs
This shows a steady uptrend where the price keeps moving higher but within a range.
Traders use this pattern to:
Buy near the lower support line
Sell near the upper resistance line
Look for a breakout above the upper line for a stronger upward move
ICICI Bank’s stock showed an ascending channel on the NSE over several months. The price formed higher highs and higher lows, moving between two rising parallel lines.
Each time the price approached the lower support (around ₹900–₹980), buyers stepped in and pushed it higher. Near the upper resistance (around ₹960–₹1,040), prices slowed or corrected.
Traders used this pattern to buy near support and sell near resistance. Later, when the stock broke above the upper trendline with strong volume, it signaled a bullish breakout and a possible faster uptrend.
• 1948 – Formal Documentation
The pattern was described in by Edwards and Magee, which laid the foundation for modern chart patterns.
• Early 20th Century – Dow Theory Influence
The idea of higher highs and higher lows as a sign of an uptrend comes from Dow Theory, which influenced such patterns.
• 1980s Onwards – Popularisation
With the rise of charting tools and technical analysis software, patterns like ascending channels became widely used by traders globally.
Definition
An ascending channel is a chart pattern where the price moves upward within two parallel rising lines.
The lower line (support) connects higher lows
The upper line (resistance) connects higher highs
This shows a steady uptrend where the price keeps moving higher but within a range.
Traders use this pattern to:
Buy near the lower support line
Sell near the upper resistance line
Look for a breakout above the upper line for a stronger upward move
Case Study
ICICI Bank’s stock showed an ascending channel on the NSE over several months. The price formed higher highs and higher lows, moving between two rising parallel lines.
Each time the price approached the lower support (around ₹900–₹980), buyers stepped in and pushed it higher. Near the upper resistance (around ₹960–₹1,040), prices slowed or corrected.
Traders used this pattern to buy near support and sell near resistance. Later, when the stock broke above the upper trendline with strong volume, it signaled a bullish breakout and a possible faster uptrend.
Historical Reference
• 1948 – Formal Documentation
The pattern was described in by Edwards and Magee, which laid the foundation for modern chart patterns.
• Early 20th Century – Dow Theory Influence
The idea of higher highs and higher lows as a sign of an uptrend comes from Dow Theory, which influenced such patterns.
• 1980s Onwards – Popularisation
With the rise of charting tools and technical analysis software, patterns like ascending channels became widely used by traders globally.
Illustration
