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The Science of Stock Market Technical Analysis
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Without trade, there will be no progressive economy. One of the bases of a progressive economy is an active and continuous trade which facilitates the continuous flow of money around the market. As long as there is an existing trade between two individuals or entities, be it a commodity or other things that can be purchased or sell to generate profit, the flow of money around the market will go on and a progressive economy is within easy reach.
In addition, the existence of market further established a common ground for different trading activities. Apart from the physical structure or place of trade, the market is considered to be a systematic process allowing traders to ask and bid, thus helping sellers and bidders to interact and make various deals. It functions like a voting system wherein the candidates (the sellers) seek the support of voters (the buyers) by offering their platform of governance (their product and its market price).
One of the market systems that are very common among traders is the stock market (i.e. New York Stock Exchange). It is the market for company stock trading and its derivatives. For individuals outside the trading industry, stock is a term that is difficult to understand. Unlike other market system such as the foreign currency exchange market and commodities market wherein you can easily determine what is being traded (currency and commodities, respectively), stock creates confusion among non-traders and even to neophyte traders.
In finance, stock is the capital raised by a certain company or corporation. Such capital is accumulated through the issuance and release of shares to interested individuals or organizations. Like in acquiring a pair of foreign currency or a commodity for revenue, the acquisition of shares of a company’s stock allows you to partake in the revenues (based on the percentage of your share ownership) generated by that company.
However, the issuance and distribution of stocks in the market requires extensive study and evaluation. Like the currency or commodities wherein you need to take a position on a certain deal, there is a right time to distribute stocks in the market to raise more capital for the company. It is determined through a technical analysis.
Aside from determining the ideal time to distribute stocks on the market, technical analysis is also used to evaluate securities (the legal right that is awarded by the borrower to a creditor and often represented by a certificate such as shares of corporate stocks) by analyzing the statistics produced by the present market activities, volumes, and past market prices. It is done to forecast price trends in which the stocks could be sold for a profit.
Basically, technical analysis on the stock market is done through studying different charts of past price action. It includes variables such as the stock’s price, volume, and open interest (the total number of derivative contracts). In most cases, it only includes the analysis within the dimensions of the market and not the financial dimension of the company (such as dividends or cash flows). However, there are also companies who try to combine the fundamental (study of a company’s financial dimension) and technical analysis.
Even the accuracy of the results is disputed (since it is a predictive method that is based on price trend assumptions), technical analysis is one of the reliable tools that companies and stock traders can use for their quest of profitable capital raising and huge revenue generation, respectively.
Stock Technical Analysis Specific links
Stock Technical Analysis News
S&P 500 Retreat May Set Up Rally Above 1370: Technical Analysis - Bloomberg
S&P 500 Retreat May Set Up Rally Above 1370: Technical Analysis Bloomberg A retreat in US stocks will set the stage for the Standard & Poor's 500 Index to approach 1370, the level where the current bull market ran out of steam last year, according to analysts who study charts to predict market moves. |
Technical Analysis Alert for S&W Seed Company (SANW) - AVAFIN
Technical Analysis Alert for S&W Seed Company (SANW) AVAFIN From a technical perspective, this development is a sign of strength if comparing the stock price against it's moving average. Investors will consider this an indication of bullishness as long as stock movement maintains it's current trajectory. |
Golden cross blesses 3 Dow stocks - MarketWatch
Golden cross blesses 3 Dow stocks MarketWatch Technical analysis and trend following both come with a caveat that you must be unemotional when investing and act when the chart or formula tells you to. That's hard for anybody. While I don't consider myself a trader, I do use technical analysis in ... |
Technical Analysis: Associated Estates Realty (AEC) Breaches Key Support Level - AVAFIN
Technical Analysis: Associated Estates Realty (AEC) Breaches Key Support Level AVAFIN The stock price closed below the 200-day moving average of $16.38 on Wednesday. As long as prices remain below the moving average key indicator, investors will view this development as a sign of weakness. Additionally, today's stock price for AEC ... |
Groupon Bull Vs. Bear: Where Is Stock Heading? - CNBC.com (blog)
Groupon Bull Vs. Bear: Where Is Stock Heading? CNBC.com (blog) The way the industry is going to shake out in a couple of years is there's just going to be two, maybe three players in this kind of group-purchasing space,” Barrington Research analyst Jeff Houston said on “Fast Money.” Houston rated the stock ... |