V.13:11 (473-477): Support and Resistance with the Andrews Pitchfork by Barbara Star

Support And Resistance With The Andrews Pitchfork by Barbara Star, Ph.D

Here's a charting technique that's available in most of today's popular software. If you're not familiar with it, here are some tips to using it. If you are familiar with it, it's time for a refresher.

Every technical analyst recognizes the importance of identifying support and resistance areas on price charts. Early in the history of technical analysis, Alan Andrews developed one such technique, which he called the median line method. The median line method calls for drawing a line from a high or low price level through the median price of a subsequent corrective rally or decline and once that is done, adding parallel lines above and below the median line from the corrective highs and lows. This results in three lines: a long center line (the median line), an upper channel line and a lower channel line. Each line defines potential support or resistance. Because of the shape it makes on a price chart, the median line method soon became known as the Andrews pitchfork . The long center median line resembles a handle, while the two shorter parallel lines are the tines of the pitchfork. Most charting software today includes the Andrews pitchfork among their technical studies, but it's easy enough to construct manually on price charts.