Question

Give an example of how you might use a trend line to make a prediction about an outcome. Identify the variables and explain the rationale for using the trend line to predict the outcome. (3 points)

Answer 1

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A very good example of what we can use predict outcomes is : Support and Resistance trend lines for Stock Movements.

if the stock is moving in a trend, then it becomes easier to trade the stock by studying the Resistances and the Supports. If you can predict or anticipate the resistances you will get the correct buying points, and can sell the stock in profit at a higher prices, designated by the predicted resistances.

Hence, we can use the predicted trendline of resistances and supports for profiting through trading stocks.,