Importance of Trend Analysis: Types of Trends, Market Segmentation

Trend Analysis
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Introduction
Trend analysis refers to an aspect in business strategic which involves prediction of future stock movement. The predictions made in the analysis are mainly based on previous history of stock movement. A trader looks back at the performance of previous trade periods and anticipates the likelihood of either slow, moderate or quick movement of stock. This paper has focused on the types of trends and how trade analysis is conducted. Further, this discussion has discussed the importance of conducting trend analysis.
Types of Trends
There are three categories of trends in the business sector. They are short-term, long-term and intermediate. Short term trends are those that run for a short period of time. Often, such trends are influenced by current times, tastes and preferences. For instance, during the cold and rainy seasons, rain coats, umbrellas and trench coats have a high demand. However, as soon as winter sets in, majority of people move away from buying such items. This is an example of a short term trend that only lasts for limited period of time. Long term trends are those that are not dictated by times and preferences (Porter et al, 2011). For instance, food stuffs will be consumed regardless of the period and or time of the year. Although there are specific food stuffs that are likely to be out of season at some point, food general is all season commodity.
Importance of Trend Analysis
The main aim of trend analysis is to get the direction that the market is taking at any given time. It is necessary for businesses to keep up with trends and move with them. This is one of the most successful business...