TRENDLINES

Trendlines are the screwdriver in your technical analysis toolbox. They are the simplest and most common tool you will use. Up trendlines follow the bottom of your candlesticks and down trendlines follow the tops of your candlesticks. Using trendlines does not have to be an exact science. They represent a tight general area of where you can expect buying and selling to come into a stock. Just because a candlestick closes above or below a trendline, does not mean that the trend is violated. But if that does happen, watch the stock closely the next several days as it could be a flush and resume the trend, or it really could be the start of a new move in the opposite direction. After a strong trendline is violated, keep it on your map - as months later, that same trendline could come back into play as a support or resistance area.

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