Trend Analysis

Trend analysis is a widely followed technical analysis tool founded on the notion that prices move in trends. In essence, the direction of prices (highs/lows) over a given trend length (short term to long term) – graphically displayed using trend lines – allows analysts to plot trend formation. Trends can be an uptrend, a downtrend or a sideways trend. Drawing a trend line into the future enables traders to set support and resistance levels.