**Channel/Consolidation Examples**

StockFetcher offers a number of pre-built channel screens. These include:

While these are often all thats needed to find stocks trading in a channel or consolidation phase, it is also useful to construct channel/consolidations screens from scratch.

Before doing this you'll need to ask yourself some of these questions:

- How long is the channel?

- How far apart is the upper and lower channel?

- Is the channel defined by closing prices or the high and low values of each trading day?

- Is the channel sloping in some direction or is it horizontal.

- Are you looking for a breakout condition?

Starting off with a simple scenario, say the channel you're looking for is defined as follows:

- Channel based on 30 trading days

- the Upper/lower channel is defined by the daily high and low values

- The top of the channel is no more than 5 percent above the lower channel

- Horizontal trading

- No breakout condition

First define the top and bottom of the channel by the 30 day low and high:

set{channeltop,high 30 day high}

set{channelbottom,low 30 day low}

Now define the difference of today's high and the high 30 days ago:

set{tchg, channeltop minus channeltop 30 days ago }

Do the same for the low:

set{bchg, channelbottom minus channelbottom 30 days ago}

Now calculate the absolute difference (ie we don't care if it's above or below at the moment:

set{atchg, abs(tchg)}

set{abchg, abs(bchg)}

Next, determine the ratio of the difference. In other words, a small value of say 0.01 (or 1 percent) indicates a small change.

set{channeltopchange, atchg / channeltop}

set{channelbottomchange, atchg / channeltop}

Now to the actual screen. First, limit to stocks closing above 5 dollars and draw the "channel" lines on the price plot.

show stocks where close above 5

and draw channeltop on plot price

and draw channelbottom on plot price

Now limit the distance of the top and bottom of the channel to less than 5 percent (read: top is lees than 5 percent above the bottom).

and channeltop < 5 percent above channelbottom

Now define the horizontal attribute of the channel by indicating that the top as changed less than .5 % from where it was 30 days ago. and the same goes for the bottom

and channeltopchange < 0.005

and channelbottomchange < 0.005

set{channeltop,high 30 day high}

set{channelbottom,low 30 day low}

set{tchg, channeltop minus channeltop 30 days ago }

set{bchg, channelbottom minus channelbottom 30 days ago}

set{atchg, abs(tchg)}

set{abchg, abs(bchg)}

set{channeltopchange, atchg / channeltop}

set{channelbottomchange, atchg / channeltop}

show stocks where close above 5

and draw channeltop on plot price

and draw channelbottom on plot price

and channeltop < 5 percent above channelbottom

and channeltopchange < 0.005

and channelbottomchange < 0.005

Now say you're looking for a case where the price breaks out from a channel. Taking the example above and reuse the same setup statements:

set{channeltop,high 30 day high}

set{channelbottom,low 30 day low}

set{tchg, channeltop minus channeltop 30 days ago }

set{bchg, channelbottom minus channelbottom 30 days ago}

set{atchg, abs(tchg)}

set{abchg, abs(bchg)}

set{channeltopchange, atchg / channeltop}

set{channelbottomchange, atchg / channeltop}

show stocks where close above 5

and draw channeltop on plot price

and draw channelbottom on plot price

Next, change your channel conditions to the prior day (since we'll be looking for a breakout on the latest day:

and channeltop 1 day ago < 5 percent above channelbottom 1 day ago

and channeltopchange 1 day ago < 0.005

and channelbottomchange 1 day ago < 0.005

Finally, find stocks where the latest closing value is above yesterday's channel top:

and close above channeltop 1 day ago

All together:

set{channeltop,high 30 day high}

set{channelbottom,low 30 day low}

set{tchg, channeltop minus channeltop 30 days ago }

set{bchg, channelbottom minus channelbottom 30 days ago}

set{atchg, abs(tchg)}

set{abchg, abs(bchg)}

set{channeltopchange, atchg / channeltop}

set{channelbottomchange, atchg / channeltop}

show stocks where close above 5

and draw channeltop on plot price

and draw channelbottom on plot price

and channeltop 1 day ago < 5 percent above channelbottom 1 day ago

and channeltopchange 1 day ago < 0.005

and channelbottomchange 1 day ago < 0.005

and close above channeltop 1 day ago

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