Thread by @gautam_icma

Trendline ( A thread)
Request you to retweet AND add post here of interesting trendlines you have come across.
In a rising market if a straight line is drawn from lowest point (or the next minor low) and successively joined to join minor lows a rising trendline is formed. (1/n)

First two lows of the trendlines make it and the third point validates it. (2/n)

While making a trendline minor overlapping may be allowed but any major overlapping causes question the trendline and the same may have to be redrawn. (3/n)

The trendline acts as good support and resistance points. (4/n)

The violation of the trendline puts an end to the present upside move at least temporarily.(5/n)

A trendline has to be extended right. The same is used for future support and resistance. (6/n)

When a trendline is violated the stock usually retraces to the trendline within a short time.After touching the trendline it falls again. This is termed as pullback to trendline.This point of pullback is an excellent point to initiate a trade with a very small stop loss.(7/n)

While testing a trendline if the stock falls on low volume or low inclination there is a high possibility that the support of the trendline will hold. If it falls on high volume or steepness is high the probability of violation of the trendline is very high. (8/n)

The slope of the trendline is very important. A very steep trendline is not likely to hold. (9/n)

A very flat trendline may be violated and the same is regained by the price in a very short time span which triggers a buy. This is usally seen at market lows. (10/n)

Semi-log trendline
Whenever a very sharp rise in a stock takes place a simple trendline can be drawn but it does not serve the purpose.
It is advisable to go for semi-log scale under such circumstances.
It is popularly used in long term charts on weekly and monthly scale.
N/N