Keltner Upper (20)

The upper Keltner band is the mid line plus a multiple of ATR. Price near or above it can signal strong upside moves.

The calculation:

Upper Keltner = Keltner Mid + (Multiplier × ATR)
Typically: Upper Keltner = 20-EMA + (2 × 10-period ATR)

What the upper band represents:

• Volatility-based boundary: Based on Average True Range, not standard deviation
• Smoother than Bollinger: ATR produces less jagged band edges
• Dynamic resistance: Adjusts with price level and volatility

How to interpret:

• Price at upper band: Strong momentum; trend likely intact
• Breakout above: Exceptional strength; potential trend acceleration
• Walking the band: Sustained strong trends ride along upper band
• Reversal from band: May indicate short-term pullback

Trading applications:

• Trend confirmation: Price consistently near upper band confirms uptrend
• Squeeze breakout: Bollinger bands expanding through Keltner signals volatility expansion
• Entry timing: Pullback to mid line in uptrend may offer entry
• Target setting: Upper band can serve as profit target

Keltner channels are popular among trend followers because the ATR-based construction makes them less susceptible to whipsaw than standard deviation bands.