Trading Channel Pattern
Support and Resistance levels develop when a stock is trading within a channel. The stock price will stay within the support and resistance levels until a breakout or breakdown will occur.
It is very common for Active traders to buy a stock at the bottom of a channel and sell at the top of the channel and vice versa. This is a very effective strategy for stagnant trading conditions.
Fundamental Analysis vs. Technical Analysis
• Fundamental Analysis: This method of evaluating Securities attempts to measure the true value of a Stock. Fundamental traders consider the overall economy, individual sectors, as well as the finances of the stock in question.
• Technical Analysis: This method of evaluating Securities attempts to predict stock trends based on statistical data such as chart patterns, moving averages, Bollinger Bands, and volume.