Adaptive Price Channel (APC)

The APC are based on the average difference between the Lowest Low and Highest High over a selected multiplier of number of intervals, therefore they tend to be associated with potential areas of support or resistance. Unlike classic Price Channel, the APC do not tend to narrow during periods of sideways trading and price consolidation, typically before a breakout.

The APC can be used to identify trend reversals or overbought/oversold levels that denote pullbacks within a bigger trend. A surge above the upper channel line shows extraordinary strength that can signal the start of an uptrend. Conversely, a plunge below the lower channel line shows serious weakness that can signal the start of a downtrend.