Forum Archive Index - September 2003

[Phaedrus <Phaedrus@techemail.com>]

Allan,
      Trends and trendlines, while closely related, are different things. A 
trendline links the reaction lows of uptrends or the reaction highs of 
downtrends. An uptrend is a series of higher highs and higher lows and begins 
when you have higher high after a higher low. One of the basic tenets of Dow 
theory is that a trend is assumed to be in effect until it gives definite 
signals that it has reversed. So, for POT to end its uptrend by beginning a 
downtrend, it would have to make a lower low after a lower high. 

17/1/03 gave a high of $4.65
11/3/03 gave a low of $3.80 (I misquoted this as $3.85 initially)
28/4/03 gave a lower high of $4.48
To make a downtrend we now therefore need a lower low (a Close lower than 
$3.80).

Usually the trendline is broken before the trend reverses but sometimes the 
change in trend precedes the trendline break.

Some notes on trends :-
http://www.sharechat.co.nz/archives/2001/06/msg00514.shtml

                Phaedrus.

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