Trendlines are only as strong as the number of price points that are connected. You can always connect two price points and highlight a trendline. But those cannot be relied upon to hold as support. As you test a trendline more and more times, that trendline becomes very important. CFR began a parabolic rise a year ago after breaking a prior downtrend and that trendline represents excellent support – until it’s broken.
Key Takeaways:
- As you test a trendline more and more times, that trendline becomes very important. CFR began a parabolic rise a year ago after breaking a prior downtrend and that trendline represents excellent support – until it’s broken.
- Last week, FFIV sold off to test its rising trendline for the fifth time since bottoming a year ago. The 130-135 range is very important for price reasons as well. Check out price resistance (red arrows) prior to the October breakout.
- The current price level represents a great reward to risk entry with minimum hopes of a retest of recent price highs. Trendline support would be a solid closing stop level.
“Trendlines are only as strong as the number of price points that are connected.”
Leave a Reply