How to Draw a Trendline…(Analysis Part:-2)
Drawing trendlines is a simple matter, really. In the chart above, you can observe two different trendlines with different colours.
The one in the yellow is a trendline that depicts the trend, in this case a downward trend. It has been drawn by connecting the upper extremities of price chart on a daily basis.
On the other hand, the trendline in blue is what is known as a support or resistance level. If prices are below this level, then it is considered to be a resistance level and once price of an asset is able to break past this and survive above it – it is known as the support level.
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