Trend lines, channels, support & resistance

This is lesson-collection #02 of Stock Knowledge 101, merging the former kb05–kb06 (2 mini-lessons). Read in order.

How to draw trend lines & use channels

This is Lesson 5/31 of Stock Knowledge 101 〔Trend〕.

• Up trend line: connect successively higher lows; valid when price holds above it.
• Down trend line: connect successively lower highs; acts as resistance on rallies.
• Channel = trend line + parallel (upper rail = resistance, lower rail = support) for buy-low/sell-high.
• A valid breakdown/breakout (volume + close) often signals a trend reversal.

📌 Trend is your friend: in an up channel, buy the lower rail — steadier than calling tops.

How to find support & resistance

This is Lesson 6/31 of Stock Knowledge 101 〔Trend〕.

• Prior highs/lows: dense historical trading zones naturally become support(below)/resistance(above).
• Round numbers and moving averages (e.g., 60-day) often act as psychological levels.
• Gaps: the lower edge of an up-gap is support; the upper edge of a down-gap is resistance.
• Once support is broken it flips to resistance, and vice versa.

📌 Find S/R by seeing where people previously traded, not by drawing lines from nothing.

⚠️ This article is a methodological illustration and does not constitute any investment or trading advice. Markets are risky; decide with caution.