[ Trendlines ]
Scott, your trendline was drawn correctly. In EK's case, there is no way to connect the line from the highest high to the lowest high immediately preceding the lowest low without the line crossing through the price bars.. Very often you can't. What needs to be done is to include as high of a high with as low of a low...all without crossing through the price bars.
Let me see if I can explain it more clearly:
Step 1: we have the highest high for the period under consideration(it can be changed, which will affect the highest high of the period, and hence the trendline), set at 2/19/97, at $94.75
Step 2: from there, tilt that trendline as low as you can until you can't go any lower without crossing through the prices. You'll find that it simultaneously hits the bar at 3/12/97 and the bars from 6/6 to 6/10/97, and that it comes close to recent rally attempt about a weeks back.
Step 3: You can see then that the trend has not been broken on EK. The existence of the trendline resistance is not a coincidence. There are far too many traders who play this, and I was just tagging along for the downward ride on EK when it came along.
Try to follow what's next:
In EK's case, the lowest high that precedes the lowest low, while still being connected to the highest high (and without the trendline crossing through the price bar!) is in early June of 1997. It's as simple as that-- you had it right from the beginning, so you didn't miss anything at all.
Whew. Hope that didn't confuse anyone even more.
Regards,
Rainier |
