We classify trendlines as being either continuation patterns or reversal patterns.
Small trendlines that form within a downtrend are continuation patterns that definitely have a bearish bias. Although the stock may not fit the bearish flag, pennant, or wedge patterns, it still remains a weak stock in a downtrend that is temporarily “resting” before it most likely plunges again. These trendlines shall be played the same as the continuation patterns previously discussed. This is to say a volume surge is not required on the break because a delayed volume surge is preferable, and the pricing action after the break should mirror the move into the pattern.
Bearish trendlines also appear after a stock has had a big rally and tops out. A large pattern indicates many stock holders would be showing a loss if the stock traded below support, and these stockholders would create much of the downside selling pressure. Breaks to the downside do not have a volume requirement. As with other bearish breaks, often there is a delayed volume surge.