Rectangle channel with downside Trading Example MSFT has been trading in a rectangle channel from October 2014 between 39.76 to 49.35. Late October 2015, MSFT broke above $49.35 and started a new Rectangle channel from 49.35 to $56.85. Again in October 2016, MSFT broke above $56.85. When Rectangle channels breakout the targets are measured using the height of the channel. Here the MSFT channel height was $7.50. So, targets are built using this height above the breakout. If price continues to trade higher, multiples of these channel height are used. The chart shows how multiples of those target levels are computed. In October 2017, MSFT reached 400% of channel height ($7.50) from its breakout level ($56.85) to $86.85.
104 Publizr Home