What does the blue line represent in technical analysis?

In technical analysis, a trend line is a crucial tool used to identify and illustrate the overall direction of a security's price trend over time. The blue line representing a trend line typically connects price peaks (or troughs) on a chart, helping analysts visually interpret the trend's strength and direction, whether it is upward, downward, or sideways. This connection of price peaks is significant because it allows traders to recognize potential support and resistance levels, as well as helping to forecast future price movements.

While the other choices describe important concepts in technical analysis, they do not specifically represent what a trend line does. The average price over a set period and a moving average of stock prices refer to different types of calculations that smooth out price fluctuations rather than establish direct connections between peaks in price. Resistance levels denote price points where stocks have historically struggled to rise above but do not inherently describe the action of connecting peaks to assess prevailing trends.