One of the basic foundation of technical analysis is that prices move in trends. The corollary to this premise states a trend in motion is more likely to continue until it reverses. So as long as the trend is intact, trendlines could be used as a buying and selling areas.
In the above figure, north side of a trendline marks a buy zone and the south side marks the sell zone. In an uptrend, the trend line acts as a support. So whenever the price dips to point 7, 9, 11 a buy position can be initiated. In a downtrend, the trend line acts as a resistance. So whenever the price rallies to point 7, 9, 11 a short position can be initiated.
However when trend lines are violated, they send an early sign of change in the existing trend.
