Theory :

The Donchian channel is an indicator used in market trading developed by Richard Donchian. It is formed by taking the highest high and the lowest low of the last n periods. The area between the high and the low is the channel for the period chosen. 

Donchian Channel Formula

1. The upper band is calculated as the highest high for the selected period.
2. The lower band is calculated as the lowest low for the selected period.
3. The selected period does not include the day on which the band is plotted (otherwise the band would never be crossed). For example, the 20-Day Donchian Channels for today are the highest high and lowest low for the preceding 20 trading days.

This version is not calculating only the channel itself, but is calculation a sort of support and resistance "sub"channels" within the existing Donchian channel. That way we can estimate the "price action" a bit more accurate

Usage :

It can be used as any "regular" Donchian channel, but also can be used for support and resistance levels assessment