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Rick

Ascending Trendline

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Ascending Trendline

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

This ascending trendline is drawn on a weekly bar chart of Sun Microsystems. The technical indicator Williams %R is displayed above the chart. Over the course of three years, the weekly low had not dipped below the trendline. In this upward trending stock, the bottoms that meet the trendline could represent bottoms of intermediate-term trends, and buying opportunities for SUNW. If the trendline is penetrated, it may signal a trend change.

The use of the Williams %R indicator in this case may support that evaluation. When the price reaches the trendline, and then begins to turn up, Williams %R does also. Notice how each low of Williams %R is higher than the last, a possible confirmation of the overall price movement.

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