![]() ![]() In other words, technical analysis attempts to understand the emotions in the market by studying the market itself as opposed to its components. Technical analysis studies supply and demand in a market in an attempt to determine what direction or trend will continue in the future. ![]() Although past share prices are the major data used by technical analysts, other statistics such as volume of trading and stock market indices are also utilized to some extent. He then looks at the current price data to see if any of the established patterns are applicable and if so, extrapolations can be made to predict the future price movements. The rationale behind the technical analysis is that the share price behavior repeats itself over time and analysts attempt to derive methods to predict this repetition.Ī technical analyst looks at the past share price data to see if he can establish any patterns. Technical analysis does not give the intrinsic value of a security, but instead it includes charts and other tools to identify patterns that can suggest future activity. ![]() Technical Analysis is a method of evaluating securities by analyzing the statistics generated by market activity, such as fast prices and volume. An investor in the stock market is interested in buying securities at a low price and selling them at a high price so as to get a good return on his investment. Stock prices move in trends and cycles and are never stable. Prices of securities in the stock market fluctuate daily on account of continuous buying and selling. ![]()
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