Technical analysis in stock market is a method of predicting the future price movements of stocks based on their historical price data. The goal is to identify trends and patterns in the price data that can be used to make informed investment decisions.
The same historical price data can be represented in different types of charts that can be used in stock chart analysis, including line charts, bar charts, and candlestick charts. These charts can show different types of information about a stock, such as its opening and closing prices, its high and low prices, and volume.
Based on some mathematical formulas we can generate some indicators like moving average, rsi or stochastic using historical price data. Technical analysts often use such indicators to signal a buying or selling opportunity. For example, the moving average is a common indicator that shows the average price of a stock over a certain period of time. A crossover of the moving average can signal a change in the trend of the stock.
However, Technical analysis is just one tool in the investor's toolbox, and it should not be relied on exclusively to make investment decisions. Fundamental analysis, which involves analyzing a company's financial statements and other data, should also be considered.
The same historical price data can be represented in different types of charts that can be used in stock chart analysis, including line charts, bar charts, and candlestick charts. These charts can show different types of information about a stock, such as its opening and closing prices, its high and low prices, and volume.
Based on some mathematical formulas we can generate some indicators like moving average, rsi or stochastic using historical price data. Technical analysts often use such indicators to signal a buying or selling opportunity. For example, the moving average is a common indicator that shows the average price of a stock over a certain period of time. A crossover of the moving average can signal a change in the trend of the stock.
However, Technical analysis is just one tool in the investor's toolbox, and it should not be relied on exclusively to make investment decisions. Fundamental analysis, which involves analyzing a company's financial statements and other data, should also be considered.