Hi happy new year. Yes shares outstanding change constantly, the...

Hi happy new year. Yes shares outstanding change constantly, the question is to what degree.

For example, if there was a 2:1 stock split the share price would half, if a technician looks at the chart without looking through these announcements, all momentum indicators would turn bearish and there will be a downside gap breaking the trendline, which in reality the price has not changed at all. Btw I see you're using Tradingview, you can show stock splits in the charts.

Looking at FLC, in Dec 2016 they had 280m shares, in Dec 2017 they had 435m shares, this means SP should fall by 55% alone due to dilution, between Dec'16 and Dec'17 FLC shares fell by 42%. In this case the only thing TA shows is what happened to the SP of the original shareholders if they held from Dec'16 to Dec'17, which now only represent 64% of the total shares outstanding. Fast forward to Dec'19, there's 625m shares outstanding, the original shares from Dec'16 now only represent 45% of total shares outstanding, if you draw the trendline from Dec'16 to Dec'19, the trendline is only reflective of those original shareholders which now make up less than half the company, how effective is that?

So imo trendlines and channels for companies that have roughly similar shares outstanding (within 10% range) is infinitely more accurate than companies that toy with shares outstanding constantly via split, buy-backs and stock dilutions.

Also do you use close or extreme prices to set the trendline? I note with interest you mentioned it shouldn't go through bodies, another technician told me its its better if it goes through (few) bodies because the more candles it touch the more accurate the trendline is, as it is not an exact science but an art to show the general trend, if so using your trend and we connect those high reached in Oc'19, Nov'19 and piece some candles in Jan'20, the high in Jun'20 touched the upper downtrend line perfectly with the SP finally broken the trendline in late October 2020.

What are those other indicators you use? I'm still new to TA and trying to learn