Uptrend

DEFINITION of 'Uptrend'

Describes the price movement of a financial asset when the overall direction is upward. A formal uptrend is when each successive peak and trough is higher than the ones found earlier in the trend.

Uptrend



Notice how each successive peak and trough is located above the previous ones. For example, the peak at Point 4 is higher than the peak at Point 2. The uptrend will be deemed broken if the next low on the chart falls below Point 5.

Uptrend is the opposite of downtrend

BREAKING DOWN 'Uptrend'

The goal of most technical traders is to identify a strong uptrend and to profit from it until it reverses. Selling an asset once it has failed to create a new peak or trough is one of the best ways to avoid the large losses that can result from a reversed trend. Many technical traders will also draw trendlines to identify an uptrend and will use this tool as a guide for when to sell as it can also be an early indication of a trend reversal.

RELATED TERMS
  1. Downtrend

    Describes the price movement of a financial asset when the overall ...
  2. Inverse Head And Shoulders

    A chart pattern used in technical analysis to predict the reversal ...
  3. Triple Top

    A pattern used in technical analysis to predict the reversal ...
  4. Detrended Price Oscillator (DPO)

    An oscillator that strips out price trends, in an effort to estimate ...
  5. Expansion

    The phase of the business cycle when the economy moves from a ...
  6. Triple Bottom

    A pattern used in technical analysis to predict the reversal ...
Related Articles
  1. Active Trading Fundamentals

    Dow Theory: Dow Theory Specifics

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.comSo far, we have discussed a lot of the ideas behind Dow theory along with its main tenets. In this section, we'll take a ...
  2. Trading Strategies

    Technical Analysis: The Use Of Trend

    By Cory Janssen, Chad Langager and Casey MurphyOne of the most important concepts in technical analysis is that of trend. The meaning in finance isn't all that different from the general ...
  3. Forex

    Chart Basics (Trends)

    The trend can be your friend, but you need to find it first.
  4. Charts & Patterns

    Distinguish A Stock Price Correction With A Price Trend

    We explain how you can use trend lines to help avoid market corrections.
  5. Active Trading Fundamentals

    Dow Theory: The Three-Trend Market

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.comAn important part of Dow theory is distinguishing the overall direction of the market. To do this, the theory uses trend ...
  6. Charts & Patterns

    Analyzing Chart Patterns: Round Bottoms

    By Chad Langager and Casey Murphy, senior analyst of ChartAdvisor.com A rounding bottom, also referred to as a saucer bottom, is a long-term reversal pattern that signals a shift from a downtrend ...
  7. Chart Advisor

    Trending Stocks Near the Buy Zone (FSLR, HRL)

    These trending stocks have recently pulled back, providing a potential buying opportunity. Here's some trades to consider.
  8. Trading Strategies

    Key No.3: Major Indexes Reach New Low

    Learn the best ways to foresee market corrections and how to profit from them.
  9. Trading Strategies

    Mastering Short-Term Trading

    The proper application of a few different tools can help a short-term trader succeed.
  10. Stock Analysis

    Best US Equity Sector Since Market Peak October 2007

    Find out about the best U.S. equity sectors since market peak in October 2007, how they became the best and what may happen if market conditions change.
RELATED FAQS
  1. What does a double bottom tell a trader about the overall trend?

    Learn how a double bottom pattern forms on a price chart and why many traders consider double bottoms to be a sign of reversal ... Read Answer >>
  2. What is a common price target when identifying a double top?

    Learn about a common bear trading strategy once a double top pattern is identified, and discover how conservative and aggressive ... Read Answer >>
  3. How are Triple Bottom patterns interpreted by analysts and traders?

    Learn about the formation and interpretation of the triple bottom pattern, how to identify it on a chart and how to confirm ... Read Answer >>
  4. What does a double top tell a trader about the overall trend?

    Find out what technical chartists mean by a double top trend in a security's price movements, and learn why double tops are ... Read Answer >>
  5. How effective are double tops in spotting a change in the overall trend?

    Learn about the double top price chart pattern, a commonly appearing indicator used to establish resistance levels and possible ... Read Answer >>
  6. How are descending tops interpreted by traders and technical analysts?

    Find out how technical analysts and traders identify and interpret a descending tops pattern and why this pattern is viewed ... Read Answer >>
Hot Definitions
  1. Goodwill

    An account that can be found in the assets portion of a company's balance sheet. Goodwill can often arise when one company ...
  2. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  3. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  4. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  5. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  6. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
Trading Center