The trend reflects in which direction a certain stock is trading.
The technical analyst can always distinguish three different types of trend behavior and will choose to buy or sell based on that underlying trend.
A particular stock or an index is always trading in one of these three trends: the uptrend (prices going up with higher bottoms and higher tops), the downtrend (prices going down with lower tops and lower bottoms) and the sideways trend / trading range (prices trading between an upper and lower boundary).
"The trend is your friend" is the most important rule of the technical analyst.
This rule points out that you should not trade against the trend.
So you will want to open long positions when the market is in an uptrend, and you will sell your positions (or go short) in a downtrend.
The reason for this is that there's allways a higher chance that the the current trend will continue, while the chance for a trend reversal is much lower.
So if the market is going down, you should not open long positions.
It's better to wait for a clear trend reversal to the upside.
When the market is going up, you should open long positions.
You can take a profit when you start to see signals that point to a trend reversal (like a negative divergence), or you could wait for a confirmation of these signals.
When a stock cannot rise above a previous top, that's slightly bearish.
When a stock breaks below a previous bottom, you get a confirmation of weakness and this could be the trigger for a longer correction to the downside.