Other Types of Trend Lines

The concept of trend is central to the field of technical analysis. Therefore, analysts have developed a number of applications and variations of trend lines. Trend lines are not just useful with bar charts; analysts using point-and-figure charts make use of trend lines. Speed lines, Andrews Pitchfork, and Gann fan lines are all example of types of trend lines technical analysts use.

Trend Lines on Point-and-Figure Charts

A trend line may be drawn between successive lows or highs in the standard, old-style, point-and-figure charts, just as they are drawn in a bar or candlestick chart. There is one variation, however, that occurs in the three-box reversal method. For this type of chart, trend lines are drawn at 45-degree angles (see Figure 12.19). Upward trend lines, called bullish support lines, are drawn at a 45-degree angle from the lowest low, and downward trend lines, called bearish resistance lines, are drawn from the last peak. These lines are not really trend lines in the sense that we have covered earlier, but price penetration through them has very specific meaning. We cover these in more detail in Chapter 16, “Point-and-Figure Chart Patterns.”