Technical analysis is built on the assumption that prices trend. Trend lines are an important tool in technical analysis for both trend identification and confirmation. A trend line is a straight line that connects two or more price points and then extends into the future to act as a line of support or resistance. A proper trend line has to connect two or more peaks or troughs; otherwise, it will be drawn
in space and will have no significance.
UP TREND LINE
A rising price combined with increasing demand is very bullish and shows a strong determination on the part of the buyers. As long as prices remain above the trend line, the uptrend is considered solid and intact. A break below the uptrend line indicates that net-demand has weakened and a change in trend could be imminent.
(supply less demand) is increasing even as the price declines.
A declining price combined with increasing supply is very bearish and shows the strong resolve of the sellers.As long as prices remain below the down trend line, the downtrend is considered solid and intact. A break above the down trend line indicates that net-supply is
decreasing and a change of trend could be imminent.