Technical Analysis—Technical analysis is based on the assumption that all information that can affect the performance of a stock company fundamentals, economic factors and market sentiments, is reflected already in its stock price. Accordingly, technical analysts do not care to analyes the fundamentals of the business. Instead, the approach is to forecast the direction of price thought the study of patterns in historical market data- price and valume . believe that market activity will generate indicator in price trends that can be used to forecast the direction and magnitude of stock price movements in future.
1 )the volume of trading price movements important inputs strength of the trend.
2)—history of past price provides indications of underlying trend and its direction.
Technical Analysis is based on these three elements into price charts, point of support and resistance in charts and price trends. By observing price and volume patterns, technical analysis try to understand if there is adequate buying interest may take price high OR if there is adequate selling interest may take price low.
Technical Analysis is based on study of various trends- upwards; downwards or sideways, so that traders can benefit by trading in line .identifying support and resistance levels, here is lot of buying and selling interest respectively, trading volumes are important parameters to confirm a trend. Technical Analyisis converts the price and volume data into charts that represent the stock price movements over a period of time. Some of the charts used include line charts, bar charts, candlestick chart….charts are used to identify trends, reversal of trends and triggers for buying or sellingggg a stock.
ASSUMTIONS OF TECHNICAL ANALYSIS ----Following assumption are delineated;-
1) supply and demand are governed by many rational and irrational factors.
2) the market price following by the supply and demand .
3) trend change in reaction supply and demand relationship
Technical Analysis is based on study of various trends- upwards; downwards or sideways, so that traders can benefit by trading in line .identifying support and resistance levels, here is lot of buying and selling interest respectively, trading volumes are important parameters to confirm a trend. Technical Analyisis converts the price and volume data into charts that represent the stock price movements over a period of time. Some of the charts used include line charts, bar charts, candlestick chart….charts are used to identify trends, reversal of trends and triggers for buying or sellingggg a stock.
ASSUMTIONS OF TECHNICAL ANALYSIS ----Following assumption are delineated;-
1) supply and demand are governed by many rational and irrational factors.
2) the market price following by the supply and demand .
3) trend change in reaction supply and demand relationship
Technical Analysis is based on study of various trends- upwards; downwards or sideways, so that traders can benefit by trading in line .identifying support and resistance levels, here is lot of buying and selling interest respectively, trading volumes are important parameters to confirm a trend. Technical Analyisis converts the price and volume data into charts that represent the stock price movements over a period of time. Some of the charts used include line charts, bar charts, candlestick chart….charts are used to identify trends, reversal of trends and triggers for buying or sellingggg a stock.
ASSUMTIONS OF TECHNICAL ANALYSIS ----Following assumption are delineated;-
1) supply and demand are governed by many rational and irrational factors.
2) the market price following by the supply and demand .
3) trend change in reaction supply and demand relationship
Technical Analysis is based on study of various trends- upwards; downwards or sideways, so that traders can benefit by trading in line .identifying support and resistance levels, here is lot of buying and selling interest respectively, trading volumes are important parameters to confirm a trend. Technical Analyisis converts the price and volume data into charts that represent the stock price movements over a period of time. Some of the charts used include line charts, bar charts, candlestick chart….charts are used to identify trends, reversal of trends and triggers for buying or sellingggg a stock.
ASSUMTIONS OF TECHNICAL ANALYSIS ----Following assumption are delineated;-
1) supply and demand are governed by many rational and irrational factors.
2) the market price following by the supply and demand .
3) trend change in reaction supply and demand relationship
Advantages of technical Analysis--- the major advantage of their method is that it is not dependent on financial statements. They also contend that a lot of non –financial information and science of the mind factors do not appear in the financial statements. They do not collect information to derive the value of the stocks. They need only acknowledge movement to a new value for whatever reason.
Technical Rules and Indicatiors--- there are numerous trading rules and indicators. There are trading rules and indicators to be applied for individual securities. Some of the following-
Fixed income securities and technical analysis ----Techincal analysis use past price and predict future price. A broad range of techinques and indicators based on price and valume data such a chart analysis moving averages, filters and used to identify predictable patterns in stock price. The theory and rational for technical analysis of bonds are the same as for stock, and stock and many of the same trading rules, are in fact used by analysis in bond markets.
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