What Is a General Upward Trend in Stock Prices?

Stock prices move upward or downward over time. An uptrend, or upward movement, occurs when the stock’s price rises continuously, and its value grows.

An uptrend is characterized by higher swing lows and swing highs. As long as it keeps creating this pattern, the trend remains intact. An uptrend line connects a minimum of two bottoms—the greater the number of bottoms, the more confident investors become.

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Characteristics of an Upward Trend

When a stock is on an upward trend, each peak (high) and trough (low) reaches progressively higher values. An upward trend does not necessarily mean a stock's all-time high—it could be the highest in recent weeks or months. Take the screenshot below, showing the stock price of Apple Inc. (AAPL) over the last three months. Drawing a line through the middle of the peaks and troughs for the last month shows an upward trend, but it's still not as great as its all-time high of $180.73.



This gradual increase in peaks and bottoms suggests that the outlook is generally optimistic. It anticipates that there is a good chance that the stock will continue to appreciate, but this is never guaranteed.

More investors might then purchase the stock, raising its price even further. If the price falls, investors may take advantage of the lower price and buy more, arresting the fall, though there is no guarantee that it will rise again and so caution is always necessary.

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Why Should You Pay Attention to Trends?

Knowing about market trends and their associated risks will help you make smarter trading decisions. After all, stock value never moves in a straight line—there are always ups and downs.

If you're better informed about what's happening, you'll have more chances to profit.

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