An ascending channel is a chart pattern formed by two parallel lines and with ascending inclination that contains the price action. It is also known as a bullish trend channel or simply a bullish channel. Although the price does not always adapt perfectly to the interior of the canal, the lines that form it point to important support and resistance areas.
The price channels show graphically the market trend and are a useful tool for their ability to predict changes in the general market trend. As long as the price remains inside the ascending channel, the bullish trend will continue, much more if there is a maximum above the upper line. On the contrary, the breakout of the lower line is a bearish signal and it can mean a possible change of trend.
When there is a series of higher lows and higher highs, there will be an upward tendency. The bullish price channel is drawn with a line that binds the minimums and a line parallel to the previous one that passes through the maximums.
This price pattern can be found regularly in any market and in any time frame, although the longer the time frame is, the greater its importance.
Example of a bullish trend channel