Trends in Technical Analysis

on

Trends

As we know there are two aspects in Analysis i.e. Technical Analysis (Which is based on the study of price movements) and Fundamental Analysis (We majorly focus on Intrinsic Value or True Value of Share). One of the principles in Technical Analysis is “Price Moves in Trends”.

Now the Question is What are these trends?? and how are these trends identified??

To answer the very first question, a trend is the overall direction of a market or price of any share, futures, options, etc. It is used to determine where the market is and where it is going.

Now these trends are divided into two types-

  1. Uptrend

  2. Downtrend

Let’s understand these types one by one in detail…


Uptrend

Now if the cyclical swings of the stock market or stock price are 

  • Successively Higher AND 

  • the Successive Lows are Higher, 

  • then the market trend or trend of a selected stock is UP AND

  • A Bullish Market Exists.


Downtrend

If the Successive Highs AND

  • Successive Lows are Lower

  • then the direction of the market or price of selected stock is DOWN AND

  • A Bearish Market Exists. 


Comments

Post a Comment