Trendline

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Trendlines

Up Trend Line

An UPTRENDLINE is a line that connects two or more LOWS,in a chart in an uptrend.
The more points that meet up to this line,the stronger this line is.This trendline acts as support,as prices blast off,then pullback to this line before taking off again. Therefore,in an UPTRENDLINE,the 2nd point is always higher than the 1st point,and the 3rd higher than the 2nd.

Down Trend Line

A DOWNTRENDLINE is a line that connects two or more highs in a downtrend.
Once again,the more number of points that connect,the stronger the line is.This downtrendline acts as resistance.Each down move is followed by a pullback rally to this trendline which acts as resistance only to be met with more selling and lower prices. In DOWNTRENDLINE,the 2nd point is always lower than the 1st,and the 3rd lower than the 2nd.

A break in the UPTRENDLINE signals a possible change in trend.So too with the break in the DOWNTRENDLINE.
Just have a look at the image below…..nothing like a picture to make things look better.

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