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Linear Regression Channel 50% and 100%

The idea of the Linear Regression Channel 50% is close to the Linear Regression Channel but the upper and lower lines are drawn at the distance of one, not of two, standard deviation from the Linear Regression line.

By drawing two parallel lines over and under the Linear Regression line we obtain a Linear Regression Channel 100%.

At the distance of two standard deviations over and under the Linear Regression line Parallel and equidistant lines are traced. The channel lines are located much farther from the Regression line than any of the closing prices. As far as the Regression channel is a channel for price fluctuations, the top border line shows resistance whether the bottom channel line shows support. Price values can fall out of the channel for a while but if the price stays out of the channel for a prolonged period of time the trend may reverse.

Unlike Linear Regression trendline whose purpose is to show the equilibrium price Linear Regression Channels are the indicators of possible price fluctuations from the trendline.

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