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Weekly Trading Lesson: Single Trend-Lines
January 22, 2007

Trend lines help us define the direction of the market’s current trend, as well as the extreme price levels that market’s buying and selling pressure will allow prices to reach. In an uptrend, as the buyers are clearly in control, and while the market pulls back to its relative low price levels, eventually the market cannot travel any lower as support will simply not allow it. Support is the net result of all the buyers that enter the market at specific times during the trading day. Resistance occurs as the sellers will simply not allow the market to travel higher past a certain price level. With that said, in an uptrend, the support line is our most important level to focus upon, while resistance is more important to focus on, in the midst of a downtrend. So, if support is broken and our current uptrend comes to an end, logically resistance is now what we should focus our attention to. Resistance will continue to play an influential role until it’s eventually broken, at which time, support comes back into view.