Technical Analysis

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MarketWatch  8 hrs ago  Comment 
The major U.S. stock benchmarks continue to chip away at well-defined technical resistance. Consider that the Nasdaq Composite has topped this week just under the 2015 peak, while the S&P 500 Index challenges well-documented trendline resistance.
Capital Essence's Investment Blog- 錢途集團 » Page not found  Apr 23  Comment 
This is Capital Essence's CEM News - Market Outlook (the technical analysis of financial markets) for April 23, 2015. ...our “U.S. Market ETF Trading Map” rates the S&P as a Buy. The index continues basing sideways near the upper border...
MarketWatch  Apr 21  Comment 
The S&P 500 Index has absorbed the latest market whipsaw, rising to challenge significant resistance against a bullish backdrop.
New York Times  Apr 20  Comment 
The echoes of World War II have never stopped reverberating in France. But perhaps nowhere is the divergence over the memory of the war more acute than between Russia and Ukraine.
Yahoo  Apr 16  Comment 
What to watch in the markets today. The stock rally has come as Treasury yields have sunk, viewed by some traders as an odd divergence. Etsy and Virtu IPOs offer a telling contrast.
The Hindu Business Line  Apr 14  Comment 
Despite two interest rate cuts this year by the Reserve Bank, Finance Minister Arun Jaitley today said he wants interest rate to be “a lot lower“. Jaitley also asserted there were no diff...




 
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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.

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