Here's a new way to use trend lines

Moves down to an uptrend line are often very tempting to buy. However, caution is required when the move is down to an accelerated uptrend line--or worse, a 2nd accelerated uptrend line.

To illustrate my point, let's take a look at Papa John's Pizza (PZZA | Quote | Chart | News | PowerRating).

This is a 6-month chart and notice the main trend line, trend line A. However, PZZA starts moving off that line, higher on trend line B. Then again it shoots off on trend line C. These are called accelerated trend lines. While the quick and easy profits are tempting, you must be careful. As you can see, once broken, they often break just as hard as they ran up.

So although if you had bought at the point shown, the green circle, you'd be very upset, PZZA would still be holding the main, long term trend line--trend line A.

Watching accelerated trend lines is one of DaytradeTeam's specialties. We use it daily in our day trading systems as well as our swing trading systems.

Andy Swan

Andy Swan created and co-founded DaytradeTeam five years ago on a principle of empowering individual stock and options traders with the techniques and analysis methods typically reserved for elite professionals. His expertise in technical analysis and commitment to educating members earned DaytradeTeam a top-ranking among advisory services for several years.