Technical Analysis

What Is Technical Analysis?

              Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume. Unlike fundamental analysis, which attempts to evaluate a security's value based on business results such as sales and earnings, technical analysis focuses on the study of price and volume.

Technical analysis is a method used to evaluate and predict the future movements of a stock’s price by studying its past market data, primarily price and volume. This approach assumes that all necessary information about a stock is reflected in its price and that prices move in identifiable trends that tend to repeat over time. Key assumptions of technical analysis include:

  • The stock’s price reflects all relevant information.
  • Prices follow established trends.
  • Historical patterns and trends tend to recur.
Technical Analysis
6 Technical Analysis Tools
  1. Relative Strength Index (RSI)
  2. Moving Average Convergence Divergence (MACD) Indicator
  3. Stochastic Oscillator
  4. Aroon Oscillator
  5. On-Balance-Volume (OBV) Indicator
  6. Fibonacci Retracement

KEY TAKEAWAYS

  • Introduction to Technical analysis.
  • Trend – Uptrend, Downtrend and Sideways trend.
  • Trendline application.
  • Candlestick Signals – Bullish, Bearish, Doji.
  • Candlestick patterns – Bullish and Bearish.
  • Volumes.
  • Indicators intro – RSI, Stochastic, Moving Averages, MACD, Bollinger bands, Ichimoku.
  • Relative Strength Index indicator.
  • Stochastic indicator.
  • Moving Averages indicator.
  • MACD indicator & Ichimoku Cloud.
  • Bollinger Bands.
  • Using technical screener website to find shares.
  • Practical of Technical analysis to evaluate Targets, Stop Loss, Exit, Carryforward a stock.
  • Gap Theory.
  • Support and Resistance.
  • Charting websites.
  • Price Action concept and Swing Trading concept.
Key Takeaways Illustration

FAQs

What is the best technical analysis approach?
The best approach varies, but commonly includes using tools like Moving Averages, RSI, MACD, and Stochastic Oscillators to predict future market movements effectively.
How do I do a technical analysis of Indian stocks?
Start by plotting price charts and volume, identify trends with moving averages, confirm signals with RSI/Stochastic, and validate support and resistance levels.
What are the tools for technical analysis of stocks?
Common tools include RSI, MACD, Bollinger Bands, Stochastic Oscillators, Ichimoku Cloud, Fibonacci Retracement, and On-Balance-Volume.
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