Technical Analysis

RECENT NEWS
MarketWatch  Mar 29  Comment 
In this investing primer, Nigam Arora cautions that basic technical analysis can be dangerous.
MarketWatch  Mar 28  Comment 
Technically speaking, each major U.S. benchmark has just survived this year’s first retest of the 50-day moving average. The successful tests preserve an intermediate-term market uptrend against the backdrop of a near-term consolidation phase...
SeekingAlpha  Mar 26  Comment 
The Economic Times  Mar 25  Comment 
Supports will come in at 9,035 and 8,970 levels. The RSI on the weekly chart stood at 67.5726 and it was neutral, showing no divergence from the price.
Financial Times  Mar 23  Comment 
A divergence has opened up between stocks in insurers and hospital operators
Benzinga  Mar 22  Comment 
Apple Inc.'s (NASDAQ: AAPL) stock is higher by more than 20 percent year-to-date and more than 30 percent over the past year, which has some calling for a correction. One of those is Tom McClellan, the editor of The McClellan Market Report. On...
MarketWatch  Mar 21  Comment 
The major U.S. benchmarks have swiftly taken a tenuous technical turn, reversing sharply from near-record territory. In the process, notable support points are under siege — including headline support at S&P 2,350 — against a softening U.S....
Forbes  Mar 20  Comment 
It is becoming commonplace for NBA teams to sit their star players, as the mounting evidence from health analytics suggests it is unwise to play NBA players all 82 games. However, decisions to sit star players are drawing ire from customers of...
SeekingAlpha  Mar 20  Comment 




 
TOP CONTRIBUTORS


Technical Analysis is the the study of the historical trend in an investment's price in order to predict future price movements.

Care must be taken when using technical analysis to be aware of fundamental events as they can invalidate prior technical analysis and cause large market shifts. In fact, a competing form of analysis is fundamental analysis.

The process of technical analysis can be applied to most markets including markets for commodities, securities, and currencies. Key concepts involved in technical analysis include: charts, support, resistance, trends and indicators.

Charts

Charts are graphical representations of market price and/or volume information in some time frame. For example, published charts generally provide hourly, daily or weekly data. One of the most common types of charts used for technical analysis is the Candlestick Chart. Formations, such as the commonly recognized Head and Shoulders pattern, can often be used to predict future price movement with a relatively high degree of accuracy.

Support Level

Support, within a particular time frame, is defined as a point at which a falling market price finds a bottom and does not fall any further. The price appears to bounce off of support levels and return to higher levels. There is no guarantee that a prior support level will continue to be a support level in the future.

Resistance Level

Resistance is similar to support. However, resistance is the point at which a rising market price finds a top and does not rise any further. Again, resistance may be applied to a time frame and of course a previous resistance level may fail to provide resistance in the future.

Trends

Market prices will often drift higher or lower in a series of waves. If a market is making higher highs and higher lows then it is generally considered to be trending up. If a market makes successively lower lows and lower highs then it is considered to be trending down.

It is often useful to draw a trend line along the levels of support and resistance. In particular, it is common for these trend lines to form a channel which can then be used to make trading decisions. Of course, a market may follow trend lines for a period of time but there is always the risk that it will stop doing so.

Indicators

Technical analysis often relies on the use of indicators. These indicators use mathematical formula to analyze price (and perhaps volume) action. Charts can be made using the indicator values and the information they provide can also be used to make trading decisions.

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki