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trend analysis

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Financial Dictionary

Trend Analysis

An aspect of technical analysis that tries to predict the future movement of a stock based on past data. Trend analysis is based on the idea that what has happened in the past gives traders an idea of what will happen in the future.

There are three main types of trends: short-, intermediate- and long-term.

Investopedia Commentary

Trend analysis tries to predict a trend like a bull market run and ride that trend until data suggests a trend reversal (e.g. bull to bear market). Trend analysis is helpful because moving with trends, and not against them, will lead to profit for an investor.

Related Links

Short-, Intermediate- and Long-Term Trends
Trading Trend Or Range?
Introduction To Technical Analysis
Getting Confirmation with the Momentum Strategy

See also: Bear Market, Bull Market, Reversal, Stock, Technical Analysis, Technically Strong Market, Technically Weak Market, Trend, Trendline

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Financial Dictionary

trend analysis

The analysis of a variable's past value changes to determine if a trend exists and, if so, what the trend indicates. A technical analyst may graph a stock's price throughout a period of time to determine whether a trend has been established. Analysts often attempt to determine if trends exist for a firm's earnings per share. Compare ratio analysis.

Wall Street Words: An A to Z Guide to Investment Terms by David L. Scott.
Copyright © 2003. Published by Houghton Mifflin.
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