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Price Channels were first introduced here in February 2007. They have proven to be highly accurate indicaters when used properly.

To calculate Price Channels, you must know the BASE SUPPORT for the existing PPS. If you are not familiar with reading a chart, you can get a close approximation of BASE SUPPORT by adding together the last 8 closing prices and multiplying the total by the fibonacci number 0.146. While this is only an approximation, I am working to refine the calculation.

(Note** - 2 calculators are provided for your reference - the .000x and the .00x - because Fibonacci formula's are less accurate below .001)

Definition: PRICE CHANNELS

A Price Channel is a PPS range that will indicate where a PPS will likely trade between Support and Resistance pivots. It represents a price range with proper Support and Resistance pivots to indicate the upper limit and lower limit of the channel. Quite often the PPS will linger within a channel and bounce between Support and Resistance

UPTREND Price Channel pivot points that have not been reached should always be considered a Resistance Pivot - and once crossed the same pivot will become a Support Pivot

DOWNTREND Price Channel pivot points that have not been reached should always be considered a Support Pivot - and once crossed the same pivot will become a Resistance Pivot

The GAPS between price channels represent areas where the PPS is most likely to consolidate - meaning the PPS may pause while volume catches up sufficiently to allow the PPS to move again.

It is always a good idea to watch volume movements when considering if a price channel will hold the PPS. For uptrend price channels (PPS goes higher), a lagging volume indicator may stall the PPS rise and cause it to fall lower (gap the channel) for a period of consolidation. The same is true of downtrend channels. Lagging or weak volume may stall the PPS and cause it to retrace higher (gap the channel) for a period of consolidation.