Andrew's Pitchfork

The Andrew's Pitchfork (also known as "Median Line Studies") technical indicator was developed by Dr Alan H. Andrews and is used in technical analysis to predict possible support and resistance levels.

The Andrew's Pitchfork is a drawing analytical tool that consist of three parallel trend lines that are drawn on the chart through three consecutive major support and resistance points of the trends identified. The middle line starts at the first point and intersects the midpoint of the other two points. The upper and lower lines of Andrew's Pitchfork are placed from the second and third point in parallel to the middle line.

Dr. Andrews believed that for 80% of the time, the price will be moving toward the middle line and, during the rest of the time, the price will be highly volatile. Based on this assumption, one can make a trade within the Pitchfork channel - and sell when the price bounces off the upper line and buy when the price reverses upward from the lower line. At the same time, a trader may watch when the upper or lower line of the Andrew's Pitchfork is broken as it may be a moment of possible changes in the longer-term trend.

Chart 1: NASDAQ 100 chart with Andrew's Pitchfork Tools

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