Uptrend Stock - Uptrend Lines
An
uptrend occurs when a stock makes consecutive higher highs and higher lows,
resulting in a price advance which trends higher. Each relative
high is above the preceding high, and each relative low is higher than the
preceding low. Uptrend lines gain more validity each time price touches
but does not penetrate the uptrend line. An uptrend remains a trend until
this series of higher highs and higher lows is broken. A downside
penetration of a rising
trend line is a technical sell signal, and usually the
first indication that an uptrend may soon end. An uptrend is deemed to be
complete with the formation of a lower high or a lower low.
Example of a
stock uptrend:
The chart above shows a stock in an
uptrend. The trend line connects lows and matches the slope of the
uptrend. Trend trading offers tremendous profit potential when a trend is
identified correctly.
Example of an uptrend line:
An uptrend line connects lows during a
stock uptrend, but the downside penetration of the uptrend line is a technical
sell signal or
short selling signal. The downside break of the trend line in this stock was the
first indication that the trend was ending, and provided an excellent place to
exit the trade.
Be sure to learn more about
trend lines
as well as
downtrends.
The Stock Bandit, Inc. - 17460 IH-35 N. #160, PMB 240 - Schertz, TX 78154
Copyright 2004 -2008 The Stock Bandit, Inc. All Rights Reserved
| 
