Technical Analysis
Evaluation of the market by careful analysis of trends and stats like prices, trading volumes and industry news to identify stock movement patterns is usually called Technical Analysis. Unlike other analysis, this type of analysis does not take the financial part of a company a a metric.
We all know the stock market is a collection of numbers and graphs, Technical Analysis identifies patterns in these numerics. In the past these technical analysts held a tight hold over the market prices that they were able to control prices with their predictions. These days with the advent of online stock accounts called DEMAT Accounts and other services which allow easy entry to the market, these analysts have lost a lot of their shine.
Complex softwares are also being used to interpret numbers better by the analysts. The major area of study includes:
- Price movements
- Trading Volumes
and the patterns formed with these analysis include:
- Head and Shoulder Formations
- W Formations
- Resistance levels and
- Moving Averages
This is done by the careful analysis by the experts with a lot of experience in the market trands and they use their capabilities to predict possible upward price changes in particular stocks or other financial instruments. This prediction might be a short term trend or a seasonal movement of the stock.
These days with a lot of data available online for access by everyone, market technical analysis is gaining popularity with individual investors, who rightly think that the past performance of a stock tells a lot about its future promise. These days there are many a investor who do their successful trading based purely on analysis of numbers than know about the company.
