How to Draw Trendlines
Uptrend line: Connect two or more higher swing lows with a straight line. The line acts as dynamic support. Downtrend line: Connect two or more lower swing highs. The line acts as dynamic resistance. A valid trendline needs at least 2 touch points, but 3+ makes it stronger.
Trend Strength on NEPSE (ADX Analysis)
ADX (Average Directional Index) measures trend strength: Below 20 = no trend, 20-25 = emerging trend, 25-50 = strong trend, above 50 = very strong trend. Strongest trends: NHPC (ADX: 54.4), AKJCL (53.0), API (47.5), KBL (44.8), LEC (46.1), PPCL (41.4). All these stocks benefit most from trendline strategies.
Trendline Trading Strategy
Step 1: Identify stocks in strong uptrend (ADX above 25). Step 2: Draw trendline connecting swing lows. Step 3: Wait for price to pull back to trendline. Step 4: Buy on bounce from trendline with confirmation candle. Step 5: Stop loss below trendline. Step 6: Take profit at previous swing high.
Sector Trends
Banking: All 21 stocks in strong uptrend with average composite 70.1. Hydropower: 72 of 93 in strong uptrend. Manufacturing: 6 of 9 trending strongly. Finance: All 15 in strong uptrend.