ABSTRACT
Trendlines and Channels One of our basic tenets in this system of technical stock chart analysis-indeed, a fact that any neophyte can quickly verify for himself by inspection of the market records for whatever period he chooses-is that prices move in trends. The market in general, and the many stocks that compose it, do not jump up and down in an altogether random fashion; on the contrary, they show denite organization and pattern in their charted course. (For illustrations in this chapter, see Figures 14.1 through 14.17.)
Prices move in trends. These trends may be either up or down or sideways (horizontal). They may be brief or of long duration. They may be classied as Major (Primary), Intermediate (Secondary), or Minor, according to the rules of Dow Theory, or as Horizontal Line Formations. (The distinction between a short Intermediate and an extended Minor Trend is often more difcult to make with individual stocks than it is with the Averages, but it is not so important.) But sooner or later, trends change; they may change by reversing from up to down or down to up, and they may also change direction without reversing as, for example, from up to sideways and then perhaps to up again, or from a moderate slope to a steep slope, and vice versa.
