Market technicians look at channels as guides to tell them where the price of a stock might be headed. More than just a pair of parallel lines, a channel can be a strong indicator of future direction. Today’s big stock charts showcase such channels.
![big stock charts](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
When channels trend upwards, that’s positive. As they say, the trend is your friend. But when the trend is downwards, that’s typically not a good sign.
The position of the stock within the channel and other factors will weigh into the overall equation, as you’ll see in the following three big stock charts.
With a word of caution to always trade carefully, here are three big stock charts that have downward channels.
Twitter (TWTR)
![TWTR stock](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
With so many people on lockdown and spending their time on social media, you’d think Twitter (NYSE:TWTR) stock would be doing well. But does the first of our big stock charts support this theory?
- The halfway point in the channel is near $30 and the stock isn’t quite there yet. Look for a breakthrough past that level as confirmation of bullish momentum.
- The double-bottom pattern formed at $22, so that’s a support level. Double-bottoms tend to be bullish, so more movement to the upside is a possibility.
- However, Thursday’s red candlestick on a bright green day in the overall market isn’t what the bulls were hoping for. They’ll definitely want to see a green candle printed on Monday.
Roku (ROKU)
![ROKU stock](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Streaming is a major entertainment trend and Roku (NASDAQ:ROKU) stock is one way to take a stake in it. Watching the chart will help traders to determine whether this streaming sector upstart can provide them with strong returns.
- The midpoint of the downward channel is $100 and the stock hasn’t reached it yet. Bulls should watch that level carefully to see if the stock closes solidly above it.
- The volume has been anemic lately, which isn’t encouraging for long-biased traders. They’ll want to see green candlesticks with strong volume soon.
- If you do choose to take a position, it’s probably best to take profits at the top of the channel. After all, it’s a falling channel and the overall trend still isn’t in the bulls’ favor.
Nokia (NOK)
![NOK stock](https://investorplace.com/wp-content/plugins/lazy-load/images/1x1.trans.gif)
Nokia (NYSE:NOK) stock has provided decent returns over the years, though it has also gone through some rough patches. Still, maybe it’s time to put some tech-enhanced power into your portfolio with this stock.
- The last of today’s big stock charts shows that NOK stock is very slightly above the halfway point in the channel. It’s also holding $3 quite nicely, so that’s certainly bullish.
- This one has been trending downwards for a while. Playing the channel with a long position at the lower trend line is a dangerous game to play.
- Thursday’s candlestick is a shooting star, which is generally considered bearish. A reversal to the downside could be imminent, so be cautious here.
As of this writing, David Moadel did not hold a position in any of the aforementioned securities.