Log charts?

I was going over my NIFTY August 6, 2009 forecast, and much to my delight, my forecast of a retracing NIFTY came true. Unlike my other forecasts, I didn't identify bounds/price objectives. Instead, I drew an upsloping trendline that would support the correction.



Today, I was toggling between log and arithmetic charts and observed that a trendline that may have proved to support/resist prices on a log chart may not act as the same on an arithmetic chart. Observe the image below.







So, which chart should I use? And which chart should you use in the long term?

I suggest using log charts for long-term analysis and arithmetic charts do a good job on intermediate- and near-term analysis.

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Sanjeet Parab
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