Technical Analysis

Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Technical analysis can help investors anticipate what is "likely" to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time.

Definition 1: A method of evaluating future security prices and market directions based on statistical analysis of variables such as trading volume, price changes, etc., to identify patterns.

Definition 2: Analysis applied to the price action of the market to develop trading decisions, irrespective of fundamental factors.

Basic Factors of Technical Analysis

Market Action due to

                

ü Supply & Demand factors.

ü Fundamental, Political and Psychological factors.

Prices move in trends

                                                      

ü Identify new and existing trend.

ü Prices move in trends– Trend in motion is more likely to continue than to reverse.

History repeats itself

ü Future is the repetition of past

Technical &Fundamental

Fundamental:

ü Study the cause of market movement.

ü Supply-demand factor.

ü Government interventions.

Technical:

ü Study the effect of movement.

ü Charts, price, volume, Trend.

                               Chart Types

There are four type of charts in Technical analysis.They are

ü Line Chart.

ü Candlesticks chart.

ü Bar Chart.

ü Point & Figure Chart.