List of Financial Market Terms

A descending channel is a trend channel that is trending lower, aka Downtrend Channel.  It's identified by two sloping parallel lines containing the stock's price movements.

A lower low below a descending channel can signal an acceleration of the downtrend. A break above channel resistance of a Descending Channel can signal a "bullish nonconfirmation", aka downtrend reversal.  In order for the full bullish confirmation to occur, there must be a a series of higher highs and higher lows, as well as strong volume on the buy side action. 

Check out the Descending Channel in GRMN.  As you can see, this example also shows a break of channel resistance which indicates GRMN may be in for a reversal of this short term downtrend channel pattern.  That said, the volume on the channel resistance break (small oval) is very weak which doesn't make a very strong case for a true reversal.

downtrend channel in grmn stock

Related terms used in Day Trading and Futures Trading: Ascending Channel, Uptick, Downtick, Uptrend, Downtrend.

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