Trendline
A straight line drawn to connect successive swing lows in a rise or successive swing highs in a fall.
How it is identified
Test: the line touches at least two swing points and is confirmed by a third touch without being violated between them
Unit
qualitative
In depth
A trendline is among the most subjective tools in technical analysis, because the choice of which points to connect, whether to use closes or wicks, and whether the scale is linear or logarithmic all change the line. Two analysts drawing on the same chart routinely produce different lines and therefore different conclusions, which is a strong reason to state the rule in advance rather than fitting the line to the outcome desired. On a logarithmic scale a trendline represents a constant percentage rate of change, which is generally more meaningful over long periods than a constant rupee rate. A break of a trendline is a description of what happened, not a prediction of what follows.
Worked example
Lows at ₹462 in week 2 and ₹483 in week 9 define a line rising about ₹3 a week. By week 16 the line sits near ₹504, so a fall to ₹495 would be described as a break — a description that depends entirely on those two chosen points.
Illustrative figures, chosen so the arithmetic is easy to follow. Not a live price and not a valuation of any company.
Educational reference only
This entry explains what “Trendline” means. It is not investment advice and not a recommendation to buy or sell any security. Any numbers above are illustrative, not live prices, and nothing here predicts price direction or rates a stock. Consider your own circumstances and consult a SEBI-registered investment adviser before acting.