Definition
Trendline
A trendline is a straight line connecting a series of highs or lows to visualise the direction and slope of a trend.
An uptrend line connects rising swing lows and acts as dynamic support, while a downtrend line connects falling swing highs and acts as dynamic resistance. The more times price touches and respects a trendline, the more significant it becomes; a clean break of it often signals a trend change.
Indian traders draw trendlines on Nifty, Bank Nifty, and stocks across timeframes to time entries on bounces and to flag breakouts when the line breaks. Trendlines are subjective — slightly different anchor points change the slope — so they are best used with horizontal support-resistance and volume.
Related terms
- BreakoutA breakout is when price moves decisively beyond a defined support, resistance, or pattern boundary, often starting a new move.
- Dow TheoryDow Theory is the foundational framework of technical analysis, describing how markets trend through primary, secondary, and minor moves.
- ChannelA channel is a pair of parallel trendlines containing price between an upper resistance line and a lower support line.
- Support and ResistanceSupport is a price level where buying tends to halt a fall; resistance is a level where selling tends to cap a rise.
Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.