Near the recent high—or making a new one? Check the channel.Invesco QQQ Trust Series IBATS:QQQInvestradeA Donchian Channel is a three-line indicator outlining the price range over a chosen number of bars. Our daily QQQ chart uses 20, so the calculation looks at the latest 20 daily bars. Use the channel to locate price in its recent range Upper amber line = highest high of those 20 bars. Lower amber line = lowest low. Gray middle line = (upper + lower) ÷ 2. Together, they locate price within a consistent recent range. In QQQ’s advance into June, price repeatedly reaches and raises the upper boundary. Staying near the top of the range can accompany a sustained advance. A touch alone does not mean price is due to reverse. Understand why that range changes The lower boundary holds the late-July low through much of August while price rebounds. It jumps when that low leaves the window. The reference changed; price did not make an equivalent jump. The July steps down in the upper line similarly reflect older highs expiring. A channel can narrow because old information leaves, even without a dramatic change in the newest candle. Offset 0 includes the current bar. A new 20-bar high immediately raises the upper boundary, so the bar’s high meets the updated line. Compare it with the previous bar’s upper boundary to identify the new high. Bollinger Bands use a different calculation: a moving average with bands typically two standard deviations above and below it. Standard deviation measures how spread out prices are around their average. Donchian records the window’s extremes; Bollinger measures dispersion around an average. Try it Compare a completed June candle’s new high with the previous bar’s upper boundary. Then find a July downward step and locate the old high that expired. Follow @Investrade for more Chart Basics. For educational purposes only. Securities shown are illustrations, not recommendations to buy or sell. Past performance does not guarantee future results. Investing involves risk, including loss of principal.