Downtick
What It Is:
A downtick occurs when a security sells at a price less than the preceding sale. A downtick is the opposite of an uptick.
How It Works/Example:
For example, if there is a trade for XYZ Company at $15.50 per share, and the next trade occurs at $15.48 per share, the XYZ shares are said to be "on a downtick ."
Why It Matters:
Several consecutive downticks indicate a bearish price trend. However, a few downticks alone are not enough information to form a solid opinion on the direction of a security. It may be only random "noise" in the security's price.
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Cached on May 24, 2012, 4:18 pm