3 Signs That a Trend Might End

[Garry Greene]

Going against the trend is never a good thing, but here are a few
things that can give you a heads up when a trend is about to change.
1. Fails To Make a Higher High
By very definition an uptrend occurs when a stock is consistently
making higher highs and higher lows. A downtrend on the other hand
occurs when a stock is making lower highs and lower lows.
If an up trending stock fails to make either a higher high or a higher
low it is a good sign that the stock might reverse at some point in
the near future.
2. Fails To Break Resistance
If a stock reaches a critical level of resistance and fails to break
above it, it shows that the bulls are having a hard time pushing the
stock up higher and the stock might be overdue for a correction.
3. Severely overvalued or undervalued.
Stocks tend to go back to their true value eventually; they do not
stay overvalued forever. So if a stock is severely overvalued it will
probably go down after a while and vice versa.
4. Breaks through Support
One of the biggest tells that a trend could be ending is a break below
support. If a stock fails to bounce up off of support there is
probably a reason and it shows weakness in the stock.
Of course none of these are a good reason to call a top or a bottom.
If a stock is going up shorting it or buying a put is going against
the odds and will probably end up giving you a loss.
Instead these warning signs may be a good place to take some profits
off the table, or tighten up your stops, just in case the stock starts
to switch directions.

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