Another use of the trendline. Sometimes after the violation of an up trendline, price will decline a bit before rallying back to the old up trendline (now resistance). Fan lines are drawn are either drawn along successive peaks or bottoms. The breaking of the thrid fan line usually signals a major change in direction. While anlong the way, broken trendlines 1 and 2 often become levels of interest.
Source: Technical Analysis of the Financial Markets, John Murphy, p. 74-76
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