Investment Contrarians

Trendline

A trendline in technical analysis is an upward sloping or downward sloping line that connects at least two price points. The trendline identifies the current trend that the stock price is in: an uptrend (for an upward sloping line) or a downtrend (for a downward sloping line). The price points that the trendline represents stand for the support and resistance levels for that stock. As long as the stock price follows the trendline, then it is following the trend. Once the price penetrates the line, it is a significant event in technical analysis, because it could be signaling the beginning of a change in trend.