uptick/downtick ratio(redirected from Uptick Downtick Ratio)
In technical analysis, a ratio of block trades on a security conducted on an uptick (that is, at a higher price than the previous trade) to those conducted on a downtick (that is, at a lower price). Generally speaking, buyers initiate uptick transactions. A high ratio is therefore an indication that there are too many buyers and that the security may soon undergo a price correction. As such, a high ratio is a bearish indicator.
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A relative measure of the degree to which block transactions take place at increasing prices as opposed to declining prices. Transactions that occur on upticks are considered to be initiated by buyers, and sellers are considered to initiate transactions on downticks. Technical analysts consider a high ratio to be bearish because it indicates an overbought market.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.