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Rick

Descending Trendline

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Descending Trendline

Is formed when the price highs of a particular stock or index form an downward-sloping line.

This descending trendline is drawn on a daily bar chart of Onsale, Inc. The technical indicators Volume and MACD are displayed above the chart. Over the course of nine months, the daily high had not broken above the trendline. When the trendline is penetrated, it could have signaled a trend change.

The use of the MACD and volume indicators in this case may support that evaluation. Prior to the price penetrating the trendline, volume and MACD showed upward spikes that were not previously experienced when the price approached the trendline.

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