Ask Colin

TRENDLINE

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  1. How can I draw a valid trend line?
  2. How do you deal with the situation where a stock has broken below the trendline but resumes it's uptrend?
  3. How can I learn how to draw and interpret trend lines?
  4. What do you mean when you say to sell a stock if it stops trending up?
  5. Should I use semi-log charts for trend lines?
  6. Why don't you use trendlines, either as confirmation of trends or as exit signals?
  7. The problem of differentiating between a new bull market and a bull phase of an existing bull market can apply to any market: When a stock, index or commodity has a bull market then a bear market then another "bull" market, but with a much shallower trend than the first bull market, can that new "bull" market be regarded as a true bull market when although it makes higher peaks and higher troughs, the trend line drawn through the troughs is invalid because it penetrates price bars if extended backward in time?
  8. Please have look at the chart in the attachment. My question simply is whether the trend lines marked T2 and T3 can be considered as valid?
  9. In your article in the September 2001 issue of Shares Magazine you illustrate several wonderful examples of charts that have trended strongly over long periods. In some of these, however, the trend line at a point in time would have been broken. Each of these then continued onward and upward but, would you have sold out about the time the trend line was broken and bought back again later as they resumed trending ? If not, ie you would have stayed put, how does one know that the price reversal below the trend line will not continue downward and wipe out your profits?