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Finance GlossaryTrendline
Trendline
Definition of Trendline
A trendline is a straight line drawn on a price chart to indicate the direction of a market trend. It connects a series of higher lows in an uptrend or lower highs in a downtrend. Trendlines help identify support and resistance levels, assess trend strength, and anticipate potential breakouts or reversals.
Related Terms
Price Band
A price band is a regulatory mechanism or a voluntary limit set by an exchange or company that restricts the maximum and minimum price at which a security is allowed to trade for a given day. These bands, which are often expressed as a percentage above and below the previous day's closing price, are mainly implemented to prevent excessive volatility and market manipulation. Trading in the security is stopped or suspended if the price moves outside the set price band.
Trailing Stop Loss
A trailing stop loss is a risk-management order that adjusts automatically as the market price moves in a favourable direction. It locks in gains while limiting downside risk by setting a stop level at a fixed percentage or price distance below the current price. If the price reverses, the order helps exit the position.
Red Herring Prospectus
A Red Herring Prospectus (RHP) is a preliminary offer document filed with SEBI when a company plans to go public through an IPO, outlining the company’s business, financials, risks, management, and most issue details. It does not include the final offer price or the exact number of shares being issued. It is marked with a bold red disclaimer indicating that certain key information like price and share count is incomplete or subject to change, and it helps investors assess the company before subscription. Once the offer price and share details are finalised (usually after book-building), the final prospectus with complete priced details is issued for public use.
Advance/Decline Line
An Advance/Decline Line can help you plot the daily difference between the number of advancing and declining stocks.
As a result, the Advance/Decline Line is a technical indicator used to gauge market sentiment, price trends, and trend reversals.
Here’s how the Advance/Decline Line is calculated:
As a result, the Advance/Decline Line is a technical indicator used to gauge market sentiment, price trends, and trend reversals.
Here’s how the Advance/Decline Line is calculated:
- Calculate the number of stocks that finished in the red.
- Calculate the number of stocks that finished in the green.
- Subtract #1 from #2 to find out the net movement aka Net Advance.
- Repeat #1, #2, and #3 the next day and add the values for Net Advance.
- Add both the previous day’s and the present day’s Net Advance. Repeat for future calculations.
Gold ETF
A gold ETF is an exchange-traded fund that invests in gold bullion. Every unit of a gold ETF is backed by one gram of gold of assured purity that is held in the physical or demat form (digital).
Gold ETFs combine the lucrative value of gold with the liquidity of stocks. Thus, gold ETFs track the price of gold bullion and are traded on stock exchanges like NSE and BSE.
Gold ETFs combine the lucrative value of gold with the liquidity of stocks. Thus, gold ETFs track the price of gold bullion and are traded on stock exchanges like NSE and BSE.
High Dividend Yield Stocks
High Dividend Yield Stocks are shares of companies that generate above average dividends on top of regular market-based returns. These shares are known to be valued highly because they generate passive income as well as capital gains.
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