Stock market trends are patterns in price movements that shift with the ebb and flow of global events, investor sentiment and economic indicators. Recognizing when these trends change can help you adjust your investment strategy. Whether you’re a long-term investor or an active trader, understanding how to read these changes can help you protect your gains and capitalize on new opportunities.

The Investors Centre are generally described as upward or downward, which refer to bullish and bearish markets respectively. A bullish trend is characterized by a series of rising peaks, while a bearish trend is marked by descending peaks. Generally, trends continue until there is an unambiguous signal that they’re ending.

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The primary driver of trend changes is the balance between buyers and sellers. When there are more buyers than sellers, prices rise, as investors compete to buy assets at the best possible price. When there are more sellers than buyers, prices drop, as sellers compete to sell their shares at the best possible price.

Traders and investors use technical analysis to identify these changing patterns. They look at charts, which are graphic representations of price movements over time, to see if repeatable signals are developing. For example, if a stock’s price starts rising, it may create a chart pattern known as a support line—a horizontal line at the bottom of the chart that shows a level that the stock has trouble breaking below. Similarly, a resistance line is drawn above the chart’s highest points to show a level that the stock has difficulty exceeding.