Technical Analysis

Technical Analysis

• Technical analysis operates o the premise that market price at any time reflect all known factors affecting demand and supply for securities.

• Technical analysis is also called market analysis as it uses the market records and market information's to predict the volume and prices.

Fundamental vs. Technical

1. Sources of information2. Type of information3. Objectives4. Types of techniques used5. Emphasis6. Basic philosophy

Assumptions of technical analysis

• Market price of securities is dependent on the demand and supply forces operating in the market

• Stock prices move in a trend for long period with some minor changes, thus movement of prices is continuous in a particular direction for some time

Assumptions of technical analysis

• Shift in prices may occur due to changes in demand and supply

• Change in demand and supply can be detected earlier with the help of graphs and charts

• Price patterns projected by price movements in the market tend to repeat themselves and can be used for forcasting

Tools of Technical analysis

• Opening price• Closing Price• Highest price• Lowest price