Track line, also known as channel line or pipeline line, is a type based on trend lineAfter obtaining the trend line, a parallel line of this trend line can be drawn through the first peak and valley, which is the track line. How to use track lines for stock selection? Let's take a look together.

In general, two parallel lines form an orbit, which is commonly known as an ascending and descending orbit. The function of the track is to limit the range of stock price fluctuations, so that it cannot become too outrageous. Once a track is confirmed, the price will fluctuate within this channel. Moreover, the upper track of the track line has a resistance effect on the stock price, while the lower track of the track line has a support effect on the stock price. After the upward trajectory is formed, the stock price will operate within this trajectory and generally will not easily break through the upper and lower tracks of the trajectory. A breakthrough on the upper track means that the stock price has broken free from the limitations of the previous track, and the upward trend of the stock price will accelerate, that is, the original trend line will be replaced by a steeper trend line.

Another function of the track line is to provide alerts for trend changes. If the track line is not touched during a fluctuation and starts to turn around far away, it is often a signal that the trend is about to change. It indicates that the stock market no longer has the strength to maintain its original upward or downward scale.

In addition, it should be pointed out that the advantage of a track is that it not only has the ability to analyze trend tracks, but also can keenly detect changes in direction during the operation of stock prices.

Based on the characteristics of the track lines mentioned above, we can use them to choose the timing for buying stocks. The breakthrough here can adopt the commonly used breakthrough principle: the time is more than 3 days, the trading volume and percentage of breakthrough at the time of breakthrough are more than 5%, etc.

　　1、 Breaking through the downward channel upwards is the buying opportunity

A downtrend line is a straight line formed by connecting two peaks of a downtrend. Once the downtrend line is determined, a valley located between the two peaks that make up the downtrend line is selected as a parallel line to the downtrend line. The range between this parallel line and the downtrend line is called the downtrend channel. The descending trend line is called the upper trajectory of the descending channel, and the straight line parallel to the descending trend line is called the lower trajectory of the descending channel. Generally speaking, when the stock price falls, it will generate support and rebound when it falls to the lower track of the downward channel, and then encounter resistance and fall back when it rebounds to the upper track of the downward channel. When the final stock price breaks through the upper track of the downward channel with a large volume, it marks the end of the downward trend and the beginning of the upward trend, becoming an important buying opportunity, as shown in Figure 6-4. Short term operators should also consider the stock price falling in a downtrend channel as a buying opportunity when it encounters support from the lower track.

In a downtrend, if the lower bound is breached, it is a strong short-term sell signal, indicating that the downtrend is about to accelerate.

      2、 Breaking through the upward trajectory of the upward channel is the buying opportunity

In an upward trend, sometimes the stock price rises rhythmically along a certain upward channel, forming a clear support at the lower track of the upward channel, and then encountering resistance and falling back at the upper track of the upward channel. However, in the late stage of the upward trend, the main force is significantly pulled up, and the stock price breaks through the pressure of the upward trajectory with increasing volume. If the upward trajectory is effectively broken, it indicates the acceleration of the upward trend, and the trend line will become steeper. In a short period of time, the increase is often significant, and with proper control, substantial profits can be obtained in the short term. Therefore, in an upward trend, when the stock price breaks through the upper track of the upward channel with a large volume, it is a buying opportunity, as shown in Figure 6-5. In the uptrend channel, every time the stock price falls back to the downtrend and gains support, it is also a short-term buying opportunity.

In an upward trend, the effective breakthrough of the lower track is a strong sell signal in the short term. To reverse the trend. After the lower track of the ascending track is broken through, there will be a pullback market on its lower track, and when the upper track of the descending track is effectively broken through, there will be a pullback market on the upper track of the descending track.

In fact, the upward trend is quite common in many long cap stocks. These market makers are good at exploring the value investment and growth potential of the industry and individual stocks. They do not like to quickly and significantly raise the stock price during operation, but instead adopt a slow upward trend to break out of the commonly referred to "upward trend". On the graph, it is manifested as a wave like upward trend, where the high and low points of the stock price gradually rise. If all the high and low points are connected in a straight line, the stock price will basically move within a relatively standard upward channel. When the stock price hits the upper track of the channel, which is the pressure line, it will fall back, and when it hits the lower track of the channel, which is the support line, it will stop falling and rebound. From the perspective of wave structure, in the extension of waves 1, 3, and 5, it is often easy to form upward trending upward channels.

Generally speaking, the upward trend of stock prices is of great practical value for investors. Especially for stocks with large orbital space in the rising channel, it is most suitable to adopt short-term or band operation strategies of low buying and high selling in the channel.

The track line is an extension of the trend line concept. When the stock price rises along the track trend to a certain price point, it will encounter resistance. When it returns to a certain price point and gains support, the track line oscillates between the extension line of the high point and the extension line of the low point. Once the track line is established, the stock price is very easy to find the high and low price points. For investors, they can operate the stock based on this.