Keltner Channels are moving average bands that use a security's average true range (ATR) and exponential moving average (EMA) to determine direction and channel width. The Keltner Channel study plots three separate lines on a chart - a moving average line plotted in between one upper and one lower band, both of which are used to track volatility in a security's average true range. The bands represent the average of the high, low and the closing price of a symbol.
A closing price above Keltner Channel boundaries is typically regarded as a bullish signal, and a closing price below is thought to imply a bearish outlook.
Upper Band = EMA + multiple of ATR
Lower Band = EMA - multiple of ATR