Trendlines in Technical Analysis Boost Investment Results; Special Report by Leading Financial Web Site Penny Stock Detectives

In a recent Penny Stock Detectives article, editor Danny Esposito points out that there is no question that even fundamental analysts.

New York, NY (prHWY.com) August 2, 2012 - In a recent Penny Stock Detectives article, editor Danny Esposito points out that there is no question that even fundamental analysts use technical charts to get an understanding of where the market or a particular stock is headed. Esposito says the trendline is one of those simple visual signals that technical analysis uses to gauge direction of price on a technical chart; paying attention to this simple trendline could mean the difference between money earned and money lost.
"Technical analysis is the visual interpretation of markets or a particular stock," comments Esposito. "What is most useful about technical analysis is that the discipline has found many simple ways to interpret market action."
A trendline in technical analysis is a straight line that connects at least two price points that can extend over a short or long period of time, he says. An uptrend line has a positive slope, which means that the second price point must be above the first price point. It indicates more buyers than sellers even as the price moves higher, reports the Penny Stock Detectives editor.
"In technical analysis, a downtrend line has a negative slope, where the second point must be lower than the first point," explains Esposito. "It indicates more sellers than buyers, even as the price moves lower."
Esposito describes a technical chart of Yahoo! from 1999 as an example of an uptrend line. He concludes that had investors paid attention, they could have bought early and really benefited from a continued price rise.
Esposito also uses the example of a technical chart of Amazon.com from 1999 to 2002. He explains that the negative sloping downtrend line that developed telegraphed the price drop in the stock.
"An investor, using technical analysis, could have seen the downtrend line develop early, which would have saved the investor a lot of money had he/she sold. Or if an investor was short-selling, it would have been the perfect time to do so in October of 2000, according to the technical chart," reports Esposito.
In his opinion, the trendlines in technical analysis are very simple tools to use, but powerful in the results they can provide to investors. Spotting uptrend and downtrend lines in technical charts can make a huge difference in the money an investor can earn or save, he contends, concluding that employing these technical analysis tools is extremely useful when investing.
To see the full article and to learn more about Penny Stock Detectives, visit www.pennystockdetectives.com.

The editors of Penny Stock Detectives believe low-priced stocks, when researched properly, present investors with great opportunities to accumulate wealth and to increase the value of their investment portfolios. You can learn more about Penny Stock Detectives at www.pennystockdetectives.com.

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Tag Words: technical chart, technical analysis

Categories: Business

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