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Technical Analysis - Glossary

Up/Down Trend

WingCharts defines an up or down trend based on the direction of a particular moving average. Specifically, the direction is calculated based on the change between today and previous day's moving average (i.e. the slope).
 

As an illustration, here is the chart of Energy ETF (XLE) as of 2017/02/10:

Three moving averages of different timeframes are plotted on the chart - 20DMA (green), 50DMA (blue) and 200DMA (red). As can be seen, 50DMA and 200DMA are trending up because their directions are pointing up, while the 20DMA is trending down. 3 timeframes of trends are utilized by WingCharts: Short-Term, Medium-Term and Long-Term.
Short-Term: 9-Day Exponential Moving Average and 20-Day Simple Moving Average
Medium-Term: 50-Day Simple Moving Average
Long-Term: 100-Day Simple Moving Average and 200-Day Simple Moving Average

Up and down trends in various time frames form a basic yet crucial element of the technical picture. While the concept is simple, it is important to be cognizant of the prevailing trend and be on the right side of the trade. There is the old saying: "Trend is your friend until it is not". WingCharts combines trend analysis along with more advanced pattern recognition, such as divergences and statistical rarities, to determine whether current trend has more momentum or about to turn.

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