Rising trend line

MetaStock | Technical Analysis from A to Z - Trendlines

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Trends are often measured and identified by "trendlines. Rising trends are defined by a trendline that is drawn between two or more troughs low points to identify price support. Falling trend-s are defined by trendlines that are drawn between two or more peaks high points to identify price resistance.

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That sounds much more simplistic than it is! The goal is to analyze the current trend using trendlines and then either invest with the current trend until the rising trend line is broken, or wait for the trendline to be broken and then invest with the new opposite trend.

Introduction to Technical Analysis Price Patterns

One benefit of trendlines is they help distinguish emotional decisions "I think it's time to sell Another benefit of trendlines is that they almost always keep you on the "right" side of the market.

When using trendlines, it's difficult to hold a security for very long when prices are falling just as it's hard to be short when prices are rising--either way the trendline will be broken.

Example The following chart shows Goodyear along with several trendlines.

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Trendlines "A" and "C" are falling trendlines. Note how they were drawn between successive peaks.

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Trendlines "B" and "D" are rising trendlines. They were drawn between successive troughs in the price.

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