UK Accounting Glossary
When the price of a stock moves neither steadily upward nor steadily downward, it’s said to be in a sideways trend. A sideways trend manifests when the number of investors who want to buy a stock and the number who want to sell a stock at a particular price are in balance or nearly in balance. Shares that oscillate within a price range over a period of days, weeks, months, or even years are considered to be in a sideways trend. Often a sideways trend indicates a period of consolidation before the share price resumes a previously established up-or-down trend. Stocks that have undergone large moves in either direction are especially likely to experience a sideways trend, because long term investors and short term traders are adjusting to the new perspective on the issuing company’s prospects. Some experienced traders have learned to profit from a sideways trend by jumping into range-bound stocks at their low and selling at the high. Investors sometimes may refer to a sideways trend as a horizontal trend.
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This glossary post was last updated: 5th February 2020.