Stock Market Technical Analysis

Technical analysis is mainly known as the future of financial price movement which is based on an examination of previous price movements. If we take an example of weather forecasting which indicates somewhat possibility to happen in future. Whereas technical analysis do not provide the exact result or the prediction for future profit. With the help of technical analysis, investors could assume for the future of prices over time. By the use of wide variety of charts which present differently regarding rates and changes in it.

STOCK MARKET TECHNICAL ANALYSIS is all about the securities where the price is influenced by the force of demand and supply which is the popular term of economics demand and supply. Whenever other forces are applied to it, then technical analysis does not work well because other forces influence the price of the security. To be the most successful in stock market technical analysis assumes three keys about the securities.

First, is HIGH LIQUIDITY- cash is said to be the essential volume. Stock marketers can easily and quickly make the trade without bringing any new change in the price of the stock. There are not much buyers and seller available at any time to make the deal. To make the most possibility of commerce sellers and buyers have to change the desired price so that they can do the business without any difficulty. Many times it happens that the liquidity is often at very less in amount or may be less than a penny per share. Due to the low price, it is more easy for the investors to manipulate it.

Second, is NO ARTIFICIAL PRICE CHANGES- most common thing for artificial price changes are dividends, splits and distributions. It is tough to apply the technical stock analysis when the artificial price change affects the price chart, but still, there is not a vast difference in the value of the investment. This is how outside sources is responsible for influencing the price.

The third is, NO EXTREME News – stock market technical analysis cannot predict anything related to business such as an unexpected death of the owner or any political issues. The investors have to wait patiently whenever there is any news reflecting the influence of price, and it is an extreme story then there is no other option than waiting they have to wait till the chart settles down and again be normal after such news. Before applying technical analysis, it is very much important to know whether the security meets these three requirements or not. Because it affects the accurate analysis price influenced by outside force is useless to let's not say this.

CONCLUSION

Stock Market Technical analyst says that market is based upon 20% of logical thinking and 80% of psychological thinking where fundamental analyst thinks of that market depends on 20% of thought and 80% of rational thinking. There are no questions based on a price of the security in current time and where psychological and logical thinking for a market is open for debate. Whatever the market sets the price nobody questions it, and we go for it without any doubt because it is open to see the legitimacy and we all are the participants of that. The members are always ready to deal with everything and settle on selling and buying of stocks. These are the forces of supply and demand.

Analyzing it technically is considered to be the part of art more than science yes it is not the denying fact that there are some universal principles applied for investigating. Each investor must use his or her way that suits the personal style because art is a subject of interpretation. Yes, it may take time because developing a style needs much effort.

Neocents offers Free Stock Market Tips, Intraday Stock Advice. Learn Fundamental Analysis of Stocks, Stock Market courses, Technical Analysis Training, Nifty, BSE, NSE, Sensex.

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