Channeling stocks or rolling stocks are stocks that are repeatedly moving up and down between their support price and their resistance price. On any given day, there is usually less than one tenth of one percent of the total stocks that are currently trading in a channeling or rolling pattern. Thus, while channeling stocks can be very profitable, they can be very difficult and time-consuming to find from the thousands of stocks that are traded daily on the stock markets. Therefore, in order to find stocks that are trading in a channeling or rolling pattern it is strongly recommended that you find a service that has developed the tools and algorithms to find these stocks on a daily basis. Once found, the benefits of trading channeling or rolling stocks can be very significant.
What are the Benefits of Trading Channeling or Rolling Stocks?
Channeling or rolling stocks provide a good entry price. One of the best and safest places to buy a stock is at its support price. A channeling stock or rolling stock does not become a channeling or rolling stock until it has established a support price and a resistance price by repeatedly touching its support price and its resistance price. Once the support price has been established, the stock can be bought over and over again as the price returns to its support price.
Channeling or rolling stocks also provide an exit price. As mentioned above, stocks become channeling or rolling stocks once they have established a support price and a resistance price. When a stock is purchased at or near its support price it should then be considered to be sold as it approaches or reaches its resistance price, as the chances are high that the stock will once again hit its resistance price and turn back down towards its support price.
Channeling or rolling stocks also provide a good stop-loss price. As previously mentioned, channeling stocks have established a support price to which they tend to fall before heading back up towards their resistance price. Since not all channeling stocks will always move up from their support price, a good place to set a stop loss would be a percent or two below the support price. That way if the stock does not bounce off its support price back up towards its resistance price, the stock can be sold at a minimal loss.
First, channeling stocks, or sometimes called rolling stocks, are stocks that are moving up and down between their support price and their resistance price. While all channeling stocks will at some point break out of their channel in one direction or the other, many channeling stocks will continue to move up and down between their support price and their resistance price for a period of time. This provides the investor with an opportunity to make a fairly predictable return as the stock continues to move between its support price and its resistance price.
Channeling or rolling stocks provide a consistent, repeatable pattern of price behavior for which to trade the stock. Since channeling or rolling stocks have established a predictable, repeatable pattern, they can be bought and sold with a readily determinable entry price and exit price, as well as an easily determinable, low-risk, stop-loss price.