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Tony

Jan 30 • 13 tweets • 3 min read

The following thread will be on Trendlines, how to manually apply them, and how to approach playing them ⬇️:

Trendlines are your best friend when it comes to identifying the direction of a stock, finding potential reversals, and gauging entries and exits. Trendlines act as support and resistance areas in either trend direction.

Trendlines give you insight into the underlying trend. Trendlines are applicable on all time frames. Looking at this $LCID chart, we can identify higher lows setting in, creating our trendline.

The inverse of that, we can see $RBLX has been putting in lower highs and lower lows, creating our downtrend.

To manually draw our trendlines, we must experience a back test no matter the direction, and then price action reversal. We are looking for multiple points of contact to be able to apply these. Without this, we do not have a trend.

We can see from this $PENN chart, the continued direction of our trendline. This is showing us that once price approaches this overhead trendline again, there is a good chance we see another rejection.

These are also very applicable intraday, and the basis for one of my favorite strategies to play, trendline reversals. Looking at this $SNAP chart we can see the downtrend that formed after the morning run.

I like to look for reversals in either direction using and applying my trendlines. This will allow me to not buy into something that is already exhausted in either direction. We can see on the above chart, $SNAP was able to break above and confirm over our overhead downtrend line

When I am looking to enter something that is breaking trend in either direction, I always must first wait for confirmation. If we think back to my other threads, confirmation is extremely crucial when taking entries.

When the underlying is in a downtrend for a while, and finally breaks above the downtrend, good chance a reversal is in. Same for something that is overextended, if it breaks below that trendline, good chance it retraces.

These trendlines are easily applicable and pretty easy to spot on a chart. These should be used on all timeframes starting with the daily to gauge the bigger picture and see the underlying.

To Recap:
-Identify Upper or Lower Trend
-Check Bigger Picture
-Wait For Confirmation of Reversal
-Update These in Real Time

As always, I hope this thread helped. These are a big part of my trading and I hope you are able to utilize these as well.

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First things first, scanning through charts and seeing what looks good in either direction. I like to look for a multitude of different things. Lets take a look at this $AAPL chart for reference:

@unusual_whales

Nice double bottom near $168 and ended up closing green on the day. However I know if $167.50 fails to hold, there is also plenty of downside, so this allows room in either direction. I will then head over to @unusual_whales and check the intraday analysis for $AAPL

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