Uptrends - Profit Signal for Buying Oppertunities
Uptrends
Generally the price of the stock moves up and down in small movement over a period of time. for a few moments it increases suddenly and comes down and again will rise in small amounts and some times large amount alos. we can say that the price of the stock is RISING if it is in uptrend for timebeind. Even though the price is fluctuating by moving up and down, if the price is in uptrend we can say that it has potential to move higher.
In the price chart if the successive bottoms are higher then preceding bottoms, THE PRICE IS SAID TO BE IN UPTREND. A line drawn connecting successive bottoms is called uptrend.
The uptrend indicates that for the time being the forces of demand are stronger then the forces of supply and there more buyers for the stock then their are sellers.
In an uptrend the top position have no importance in respect of the establishment of an uptrend. if the successive bottoms are higher then the preceding ones you can conclude that the price of the stock is in uptrend.
For an example consider the example chart from one book: -
UPTREND BREAKTHROUGH
The uptrend may change or reverse at any time and the forces of supply can dominate the forces of demand. when this happens the price trend breaks the uptrend line and moves below the uptrend line.