A market trend is a perception that financial markets tend to move in a consistent direction over time. These trends can be categorized as secular for long-term shifts, primary for medium time frames or secondary for shorter time frames. Traders attempt to recognize these trends by using technical analysis, a framework that characterizes predictable price tendencies in support and resistance levels.
Businesses hope for an upward trend to manifest as a consistent rise in sales, suggesting growing consumer demand and a healthy market presence for their products or services. Analyzing these trends can help them shape pricing, messaging and marketing strategies, as well as determine where to invest resources or whether their products are suited for certain regions.
Identifying and tracking market trends can inform strategic decisions, from inventory levels and capacity planning to purchasing, facility expansion and marketing activities. To maximize the benefit of this analysis, identifying objectives and scope helps narrow the search for the most relevant data sets, tools and techniques.
It can also be beneficial to examine competitor and customer trends, such as what kinds of features are attracting consumers or what pain points they might be trying to solve. For example, when the popularity of a product such as bamboo baby clothes rises, looking at reviews might reveal a trend toward reducing sensitivity and itching associated with certain fabrics, like wool or synthetics. This could inspire a new line of products that address this need.