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, visit jewelrystoresd.com.

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.