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Wurucututu's Channel

업데이트됨

This takes the past 60 months highs and lows and average them to get the basis for this channel. The top of the channel is the highest price prints for the last 60 months and the bottom is the basis (i.e. average) divided by Pi.

This channel has more lines and from top to bottom those lines are:

Top of the channel is the highest price prints for the last 60 months (red)
Midpoint between the average and the highest prices for the past 60 months (light red)
Average of the past 60 months (black)
Same average divided by 1.5 (light green)
Same average divided by Fibonacci retracement 2.36 (green)
Same average divided by Pi (green)

This is only useful on assets that have 5+ years of price history. And it's on purpose. Also, unlike the top of the channel the bottom is derived from the average and has nothing to do with the lowest price prints for the same period. Therefore every green line tries to set a level where price could potentially bounce from.

Trending Bull Market
For a healthy bull market the midpoint between the average and the highest prices for the past 60 months is usually the place where we bounce and as long as the price keeps inside the red lines and the red lines are moving higher everything should be fine. The problems usually start when those lines start to flatten and we start closing below the midpoint between the average (light red).

Flattened Channel
When lines start to flatten I start considering the possibility for the price to visit the basis (black line) or even the next line below (light green line). Expectations should be adjusted accordingly, depending on the market conditions and the history of the asset class being analyzed.

Generational Opportunities
Both green lines at the bottom form a green filled sub-channel which I use as a place to consider generational bottom opportunities. Is expected to being visited very rarely with many years between occurrences.

More Examples

S&P500