A and BPick the most prominent lows for the line underneath the prices. This is called the support line. All the prices between these two points must be above the line. Buy stocks when the price is near this buttom (support) line.
CDraw a line parrallel to the support on top of this, the highest point between 'A' and 'B'. This creates the trend channel. Prices must stay inside this channel for the trend to be valid.
DThe move over the top of the channel is the first warning to exit your trade. Sometimes a stock will continue higher after this pattern. But, most of the time it's a sign of weakness.
EThis is another sign of weakness and another chance to end your trade. It is also a confirmation of the weaknees shown at point 'C'.