As anyone who's looked at technical analysis knows, prices will often follow trend lines for periods of time.
Why do they do that? Is it because a lot of people use TA and keep pushing prices back up when they drop below their own trend line? From what I've read, I gather the majority of investors don't use TA, so how would they know where a trend line is?
For example, take ARQ. I've had a trend line covering about the last three years drawn in for many months. Now look at yesterday (see attached). Prices dropped well below the line but at the end of the day were pushed back up for a close almost exactly on the trend line.
But since it's a sloping line, that price is not one that's particularly significant, other than for the fact it's right on the trend line. Likewise for the time in late December, which was already the 4th or 5th point of contact to the line.
So while it's nice that these things happen, it does make me wonder how over such long periods prices can still come back to touch trend lines so exactly.