A downtrend refers to declining prices. A downtrend can apply to a single equity issue or to a sector or to the market as a whole. A downtrend can be short term -- intra-day or daily -- or a downtrend can be longer term, based on weekly, monthly or yearly analysis. For some investors a succession of lower closing prices determines a downtrend. For other investors a downtrend is defined by a succession of lower lows in a stock's trading range and/or a succession of lower highs. A prolonged downtrend in the overall market is referred to as a bear market. An extremely severe and long-lasting downturn in the market may be classified as a recession. The opposite of a downtrend is an up-trend. |
