Any trend which has continued unbroken for over 3 months is considered to be a long term trend, and of some significance. This is the trend to trade with in the majority of cases. It can be thought of as the driving force behind the price and, until a fundamental change occurs in the marketplace, it will continue to do so. Signals Signals are generated primarily when trendlines are broken. A particularly strong signal is generated any time a long term trendline is broken.
Some traders also use the price bouncing off a trendline as a signal.
If an upward trendline holds, for example, you may have a buying opportunity at a relatively low price. If the price is in a well-established channel, the other side of the channel can give you an approximate price target.