As bargain hunters look for fallen stocks, technical analysts or so-called chartists often buy rising stocks and sell falling ones. They seek stocks that are in clear uptrends, which is defined as a series of higher peaks and troughs on their share price chart. Simply put, they let the “trend be their friend" and buy stocks that are sometimes making new 52-week highs.

The national director of the Australian Technical Analysts Association, Robert Brain, is wary of buying stocks in downtrends – those making lower peaks and troughs on share price charts. He buys fallen stocks only after they have traded sideways in a consolidation pattern and started to trend higher again.