A stock is said to move sideways. But it doesn't move directly sideways. It's not like one of those heart machines right after someone dies. It's more like a player in dizzy baseball trying to get to the plate after spinning around five times. The stock goes up for a bit, then it goes back down, then back up, flips to the downside again, and so on. It's moving...it just isn't getting anywhere.
The actual pattern describes a channel. Like...the stock is rubber ball bouncing through a two-dimensional tunnel. It keeps hitting a high point and coming down, before getting to a low point and bouncing back up.
The top of the channel is called resistance. Every time it gets there, traders say, "Ah, that's as high as it usually gets...better sell." Shares have trouble getting above that level.
The lower end of the channel is called support. Each time it gets down there, traders say, "It never goes below this level; I can make a quick buck buying it here and selling it when it gets toward the top of the channel." The stock usually bounces back when it reaches that level.
The resistance and support (represented by two parallel horizontal lines drawn across recent highs and lows) define a trading channel. It's the area a sideways-moving stock sticks to.
Related or Semi-related Video
Finance: What are Triple Bottom and Trip...2 Views
Finance allah shmoop what are triple bottom and triple tops
All right well this is a triple top It wants
to break out The stock was trading down here around
five bucks a share in and glam o it went
up And yes blam o is the name of the
company's new anti constipation drug a huge hit So it
went up up up to hear it Fifteen bucks tripled
in value in just a few months but then sober
reality began to hit the investing community There simply wasn't
enough constipation to go around So the stock began to
flag and traded down teo here this level at twelve
bucks But then glam o again released big news a
partnership with manish of its grandma tsa and the american
cheese manufacturing association So the stock raced again to fifteen
But no there just wasn't enough enthusiasm from buyers pay
more than fifteen bucks a share for it So you
know that's all despite this newly created a kind of
market So the stock sank back to twelve only to
then have investment interest from procter and gamble owners of
sharman who bought five percent of the company at thirteen
fifty ish year and left a lot of investors thinking
surveyed by the whole company complete with its product line
of anti constipation drinks Waymo glam Oh thankyou memo But
alas the investment community would not pay up past fifteen
to share and the stock flagged again sinking back to
twelve having created a triple top and needing something to
make things really start you know going So yeah that's
a triple top What about a triple bottom Well a
triple bottom and basically just the same thing in reverse
like this keeps hitting a low point looking like it's
going tio bottom out further But then it recovers on
the subject of bottoming out well glam o is now
available in new chewable gummy form Yeah glam o so
you never have to worry when your bottoms out
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