the hAnDbook of teChniCAl AnAlysisfigUre 13.53 Channel Projections on the 4‐Hour Chart of USDCHF.
figUre 13.54 External Channel Projections on the Daily Chart of iShares Dow Jones
Transportation Average Index Fund.
Courtesy of Stockcharts.com
In Figure 13.54, we see that a second channel price target may be obtained
externally with respect to the first channel, by constructing a new parallel line
to TL1 and projecting it from a higher peak located further back in time, which
accurately identified a top at Point F on the daily chart of iShares Dow Jones
Transportation Average Index.
In Figure 13.55, we observe numerous bearish chart formations within a fall-
ing channel, followed by a bullish broadening or megaphonic formation. Notice
how the cycle troughs recur at consistent intervals. We also see a diamond forma-
tion starting to break out to the downside to the left‐hand side on the chart.