Trend Analysis
standard fan Lines
Standard fan lines indicate a change in trend. They may be either accelerating or
decelerating. The violation of the third fan line represents strong confirmation
of a trend change. As with all types of fan lines, they provide support and resis-
tance to price action. When support is breached, it turns into resistance, and vice
versa. They are traded in a manner representative of any trendline. To construct
accelerating fan lines, locate a significant higher peak and draw a downtrend line
connecting this significant peak to gradually rising lower peaks. Only draw three
downtrend lines. To construct decelerating fan lines, locate a significant lower
trough and draw an uptrend line connecting this significant lower trough to grad-
ually declining higher troughs. Only draw three uptrend lines. See Figure 5.50.figure 5.48 Sperandeo Up trend and Downtrend Lines.figure 5.49 DeMark Uptrend Lines.