What Is Stock Channeling?

Video Transcript

"OK what is stock channeling? Stock channeling is actually it's a method of analyzing the stock. You're looking at a moving day average on a graph and on either side of that average you look at two other lines. On the positive end, the highs of that average and on the lower end, the negative side the lows of the average. And if you can find over the course of maybe four specific points when you're tracking a stock where it's consistently hit the same highs and the same lows, you will actually find a range and that moving day average actually stays in the middle and then on either side you'll have a positive and a negative high and low reading on that graph and what the stock channeling allows you to do is to look at those highs, recognize them and be able to either sell short or sell your holding and then on the negative side, buy back at a low end and carry the stock long. So what it allows you to do is to identify the highs and lows on a moving day average and at some point that channel will break as the average starts to higher or lower. But channeling in essence is just a short term trading analysis tool that you can use. So again, you find four points high or low over the, around the moving day average, you'll be able to establish a channel that you can trade within and on the high and lows you can buy and sell accordingly."