Trendlines, also known as bounding lines, are lines drawn on a stock chart that connect two or more price points. Since stock prices tend to trend, trendlines that ...MarketSmith  FEATURESLEARNSUPPORTStockChartAnalysisStockMarketStockChartsHowtoReadStockChartsDailyStockChartsWeeklyStockChartsStockChartAnalysisStockChartPatternsEversincepricesfirstbegantobecharted,investorshavebeendevisingstrategiesforinterpretingtheirmovements.Belowareafewexamplesofmorecommonstockcharttechnicalanalysistechniques.TrendlinesTrendlines,alsoknownasboundinglines,arelinesdrawnonastockchartthatconnecttwoormorepricepoints.Sincestockpricestendtotrend,trendlinesthatconnectthehighsorlowsinthestock’spricehistorycanhelpidentifythecurrenttrendandpredictwhatthestockpricemightdointhefuture.SupportLinesWhentrendlinesconnectpricelows,thisiscalledasupportline.Whenthestockpricebeginstoapproachthelinedrawnatapriorlow,youcanexpectdemandtoincreaseasbuyersanticipateabouncehigherfromthatpoint.Momentumtradersandinvestorslookingtocapitalizeonatrendingstockmightconsiderbuyingstocksneartheselevels.However,ifthestockpricedoesnotbounceoffthisline,andbreaksthesupportlineinstead,thisisconsideredasignofweakness.Lackofinterestfrombuyersatthislevelisasignsomethingiswrongandthestockmaybeheadedlower.Asidefromprice,volumeisthemostimportantcharacteristicusedtoevaluateastock’sbehavioraroundsupportandresistancelevels.Asastock’spriceapproachesasupportline,sellingvolumeshoulddryupasitapproachesthekeylevelandbuyingvolumeshouldpickupasitmovesaway.Thisisconfirmationthesupportlevelisvalidandtheuptrendwillcontinue.Ifthepricedipsbelowthesupportlevel,youshouldcheckthevolumebeforereacting.Ifvolumeislow,itisn’tassignificantasiftherewereheavilysellingbelowthesupportlevel.Ifvolumepicksupaspricedropsbelowthetrendlinethatmaybeasignthetrendisover.ResistanceLinesWhenatrendlineconnectspricehighs,thisiscalledaresistanceline.Whenstockpricesbeginrisingneararesistanceline,short-terminvestorsmaysellsharesorsellsharesshortastheyanticipatethestockw