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TrendThe long-term movement of an economic variable, such as its average rate of increase or decrease over enough years to encompass several business cycles.TrendA trend in a share price, whether upwards or downwards, which indicates an imbalance in the supply and demand for the share.when there are more sellers than buyers the trend will be downwardswhen there are more buyers than sellers the trend will be upwardsif the number of buyers and sellers is roughly equal, the market will move sideways and the share price will stay within a 'trading range'Once a trend comes to an end, it is usually reversed. So if a downward trend is broken then it usually means the beginning of an upwards trend and for technical analysts this is a signal to buy. Similarly if an upwards trend is broken, it is a signal to sell because the price is due to move downwards.If this is not obvious to you, try to think of it in terms of buyers and sellers: a downwards trend is caused by there being more sellers than buyers. If that trend comes to an end, the inference is that there is no longer a surplus of sellers and demand is beginning to outstrip supply. With fewer sellers compared to buyers, the price will be expected to rise.As well as being classified by direction (upwards, downwards), trends are also classified by duration:Minor trends - last from a few days to several weeksIntermediate trends - last from several weeks to several monthsMajor trends - lasts for anything from several months to several yearsTrendThe general direction of the market.Trend Similar MatchesUptrendUptrendAn uptrend line or rising trend is defined by successively higher prices for a share. There will be dips in the price throughout the uptrend, but each time the price drops, due to a small correction such as profit taking, the 'bottom' will be higher than the previous bottom. So on a chart of price against time you can draw a line connecting the successive bottoms. See the attached chart for an example. Simple linear trend modelSimple linear trend modelAn extrapolative statistical model that asserts that earnings have a base level and grow at a constant amount each period. TrendlineTrendlineA technical chart line that depicts the past movement of a security and that is used in an attempt to help predict future price movements. Trendline violationTrendline violationSee: 'breakout'. Short term trendShort term trendErratic price movements that last less than three weeks. Further SuggestionsIntermediate trendTrend Ratio Analysis Primary trend |
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