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Technical Analysis 19.9.24

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7 views

Technical Analysis 19.9.24

Uploaded by

guptasamprada.2005
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Technical Analysis

• Technical Analysis is a method used to evaluate securities by


analyzing statistical trends from trading activities such as price
movement and volume. Unlike fundamental analysis, which looks at a
company's financial health, technical analysis focuses on patterns in
market data to predict future price movements. It is widely used in
stock, and forex etc to identify trading opportunities.
• It assumes that past trading activity and price changes of a security
can be valuable indicators of the security's future price movements
when paired with appropriate investing or trading rules.
• Technical analysis as we know it today was first introduced by
Charles Dow as the Dow Theory in the late 1800s.
How Technical Analysis Is Used

• Technical analysis can be applied to any security with historical


trading data.
• Technical analysis attempts to forecast the price movement of
virtually any tradable instrument that is generally subject to forces
of supply and demand. Some view technical analysis as simply the
supply and demand forces reflected by the market price movements
of a security.
Key Techniques of Technical
Analysis
• Chart Patterns: Traders use charts to recognize visual patterns, which
can indicate potential price movements.
• Trend Analysis: Analyzing the direction of the market to determine if
a security is in an uptrend, downtrend, or moving sideways.
• Support and Resistance Levels: These are price levels where buying
or selling pressures halt or reverse trends.
• Indicators: provide additional information about market strength,
momentum, and potential reversal points.
Charts
• Line chart
• Bar chart
• Candle stick chart
Support and Resistance
• support and resistance, refers to how prices react when they hit
certain levels and reverse their direction. This happens because of
market psychology, where traders and investors anticipate a price
reversal at certain key levels, either support or resistance.
• Support - At support a bounce back of prices happens when the price
of an asset approaches a support level, falls to that level, and then
rebounds upward. This occurs because at the support level, many
traders believe the asset is undervalued, and they start buying. This
increase in buying interest causes demand to rise, which pushes the
price up.
• Resistance - when the price of an asset rises to a resistance level, it
hits it, and then falls back or bounces back . At resistance, there is
more selling pressure, and the asset is often considered overpriced.
Sellers start to dominate the market, driving the price downward.

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