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Andrew's Pitchfork, otherwise known as median line studies utilizes the concepts of support, resistance, and retracements (see: Support & Resistance). As is visually depicted below, Andrew's Pitchfork consists of:
- Handle
- Resistance Trendline "tine"
- Median Line
- Support Trendline "tine"
- Find a significant pivot or retracement (in the chart above, the lower left corner)
- Find the next significant pivot or retracement (the dotted blue line connects the first pivot to this second pivot)
- Find the next retracement (in the chart above, the solid blue line starting from the left and going down to the right)
Charting software finishes the pitchfork by creating the upper resistance "tine", the lower support "tine", and the median line. Note: "tine" is the terminology used by the creator of Andrew's Pitchfork, Dr. Alan Andrews.
The same rules for support and resistance apply to Andrew's Pitchfork. Look to and look to (see: Support & Resistance). Also, prices are thought to gravitate towards the median line as depicted in the chart above of the S&P 500 exchange traded fund. The chart above shows the long-term view (1 year 6 months) of the stock market; however, Andrew's Pitchfork can be used for shorter time frames.
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