Finance Glossary

Trending Sideways

Trending Sideways

 

 

A sideways trend refers to a period of time in which a stock’s price fluctuates in a relatively narrow range, moving horizontally rather than up or down. This horizontal movement usually occurs because supply and demand for the stock are nearly equal. Sideways movement happens during times of consolidation, when the price moves between strong levels of support and strong levels of resistance before eventually breaking out of the sideways pattern. Large movements in a stock’s price action, whether up or down, are often punctuated by sideways trends. This is because such large movements are not sustainable and must enter a brief period of consolidation before continuing in the previous upward or downward direction. Most often a stock emerging from a sideways trend will continue to move in the same direction it did before the sideways trend occurred.

 

 

 

 

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