Business, Legal & Accounting Glossary
A downward trend, tendency, or movement.
Any gradual movement towards a lower state or value.
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.
The stock market took a long time to recover from the downtrend.
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This glossary post was last updated: 15th February, 2020