TECHnical Side: Trend Lines

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I was on my way home after work(yehey I have work na!) and while in the service van waiting, I noticed this guy using his smartphone reading a familiar graph. Yes it is a stock chart and in the back of my mind a smile pop. Yes it is nice to know that some Pinoys now are really trying to grasp the idea of stock investing.

I am not sure what site was he reading, but with how it looks he is actually studying trend lines.

source: http://www.traderplanet.com

source: http://www.traderplanet.com

Trend lines are the lines made by drawing a line between two or more highs or two or more lows creating the graphical resistance and support of a particular stock’s movement as seen in a stock chart. Besides helping you establish the stock’s support and resistance, trend lines generally shows the direction of the stock. There is an uptrend and a downtrend trend line.

Uptrend is made by drawing a line between lows that are higher than the previous low. In effect drawing an uptrend line creates your support. Since it is a line drawn from higher lows it shows a trend going up. Downtrend on the other hand is made by drawing a line between highs which are lower than the previous. It is a series of lower highs thus indicating a downward slope suggesting a downtrend.

Financial Freedom Advocate About the blogger

Louis Delos Angeles is a Certified Public Accountant, blogger behind Investing in Philippines, and author of Investing in Stocks: Preparing for the future small amount at a time. Check him out in Google+ Learn more about Louis and his financial freedom advocacy here.

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