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I like to supplement trendline analysis with other types of technical analysis.

I do not like to rely on trendline convergence areas alone though. Purple trading channels represent price gaps (gap-ups and gap-downs).Red trendlines are for resistance trendlines.Green trendlines are for supporting trendlines.To help clarify the mess of trendlines, here are the standard colors that I always use: When drawing trendlines on a stock chart, don't be afraid to really mark it up by drawing several of them, like I did on the below 2 year daily candlestick chart for Apple. Until I get a good feel for a stock chart and its activity, I usually have up to dozen trendlines drawn on it to try and identify the true support and resistance areas.īecause of the numerous number of trendlines, being consistent with the colors can help you to analyze your chart quicker and with more confidence. A day trader may be more interested in minute and hourly charts whereas a long-term investor relies more upon weekly and monthly charts. The time frame depends upon each investors trading strategy. Trendline analysis is very versatile as trendlines can be drawn on 5 minute charts, hourly charts, daily charts, weekly charts and even monthly charts. Not only do trendlines help identify support and resistance areas, but drawing trendlines on charts can also identify chart patterns. Trendline analysis can help to identify potential support and resistance areas on stock charts.