Of course the most important thing the chartist should do is identify the trend. You should first try to identify whether the stock is producing higher tops and bottoms or lower tops and bottoms. In the attached chart of Medica, can you see how it started showing higher bottoms in late June and July of last year ? It is important to recognise and wait for this development before considering trading any stock.

What can also help in identifying the trend is a trend line or channel. You will notice the green lines running along the bottoms and the tops of the stock. These are the trend line indicators or in this case a trend channel where the stock is trading within a specified range.

Finally notice the increases in volume on the upwards moves of the stock over this period of time. Please all take the time to notice these basic but very important trend indicators as you will always do better trading with the trend.

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