A trend line is a valuable tool in finance that helps us understand a stock's price movement. It is created by connecting a stock's successive lows to determine support and successive highs to determine resistance. The more times a stock's price touches a trend line and holds, the more reliable it is as an indicator. We can use trend lines to identify long-term and short-term trends and to make informed decisions about when to enter or exit trades. When following a trend, it is important to monitor the stock's behavior, and a break in the trend for more than one day indicates a change in its character. In such cases, the trend line is no longer valid.
