DTT Buzz

Trendlines are very important aspects of trading. Not only can they predict how a stock will trade while the trendline stays intact, but they can also help predict how the stock will trade AFTER the line is broken.

Once a support trend line is broken, it will often become resistance. Let's look at a 9-month chart of EBAY:

You can see the recent penetration of the uptrend line turned the line into resistance, which EBAY was unable to break.

This is often why when we draw trendlines at DaytradeTeam, we draw them off the chart, so they will continue forever. This method helps us in our day trades and swing trades.