What is a trend line made from?
A trend line joins past highs or past lows. In a channel, the upper line runs along the highs and the lower line along the lows.
Nothing in a line knows the future. It is a summary of prices that have already happened. Each session adds new prices to that history, and the best summary of a longer history can be a different line.
What makes a line change?
- A new high or low: price goes further than the old line allowed for, so the line through the highs or lows tilts to meet it.
- A break that does not last: price closes past a line and comes back. The old line may no longer describe the range, and another can fit better.
- A channel that ends: price leaves a channel and stays away. After more than a year without a return, the app marks it dead, and another channel can become the MAJOR one.
- More history: a short channel can grow into a longer one. A minor channel today can be the longest live channel later, and so become MAJOR.
- Adjusted prices: a stock split or similar event adjusts past prices, so lines drawn on them move too.
What does that look like?
Illustrative, made-up prices. The last close is above the old line and below the new one.
The grey line was drawn through 2 earlier highs. Price then closed above it, which on that line reads as a Breakout. After the new high, a steeper line fits the highs better. The same last close now sits under the upper line, inside the channel, and is no longer a Breakout.
Nothing about the company changed, and nobody made a mistake. The history got longer.
What happens to the signal label?
A label says where the close sits against the current lines, so it moves with them. A stock can gain a label, lose one or swap one for another from one day to the next. Filter a list by Breakout today and tomorrow’s list may be different.
During market hours the labels also follow the live price, refreshed every few minutes, and after the session they settle on the close. Treat a label seen during the day as provisional. A breakout that falls back can become a Rejection; the support and rejection guide covers that.
Why do old charts look so clean?
Hindsight. Lines fit to prices already known, so a past channel looks neat and its breaks look obvious. On the day, the right edge of the chart was the hard part: nobody knew which line would hold.
So do not judge a pattern by how tidy it looks on old bars. The chart in front of you today is the one that can still change.
How to read a chart knowing this
- Read the close: a spike during the day never counts on its own.
- Check the next closes: did they stay on the same side of the line?
- Note the channel’s length: a break of a long MAJOR channel says more than a break of a short minor one.
- Look again: a pattern from last week may not be the pattern today, so check the line before you rely on it.
- Keep other evidence beside it: market breadth shows whether most stocks are moving together, and an earnings date can move price through any line.
- Plan for change: if you buy because of a pattern, build your position over time rather than all at once, and spread your money across several stocks. The app says the same the first time you open a chart.
Can I keep my own lines?
With Pro or Pro+ you can draw on stocks in your own watchlists, and your lines are saved to your account. Adding a stock to one of your lists copies its curated lines, so you can adjust those too. Lines on the 2 curated watchlists cannot be changed.
Limits worth knowing
Lines are drawn on past prices. They can be drawn badly or missed, and a label can come late or change. Breakouts fail often.
Chart in Motion does not make buy, sell or hold calls. A label describes where the close sits against a line. It is not a recommendation or a price target.
See it in the app
Open a stock to see its channels and its label, then come back to it after a few sessions and compare. More on the features page.