Technical analysis is a tool that assists deciding the timing of investment which is very vital to make wise investment decisions. The technical analysis gives results based on the assumption that history tends to repeat itself in the stock exchange. You can assume a strong probability of the same outcome whenever the pattern appears in the future. Technical analysis is nothing but the study of the internal stock exchange information and not of those external factors that reflect in the stock market. There are various technical indicators such as RSI, Stochastic, Bollinger Bands, Momentum, etc, that help you in analyzing the price move of the share. Money Classic provides you share market tips based on the technical analysis. Technical indicators help us in summarizing the following details that are:
Overall trend- spotting the overall trend is the first step that can be achieved by the moving averages, trend lines or peak/trough analysis. The trend goes up and remains there as long as the price movement is the upward sloping trend or a certain moving average. Likewise, the trend goes up as long as higher troughs form on each pullback and higher highs from on each advance.
Support and resistance- the areas of congestion and previous lows mark the support levels below the current price, whereas, the areas of congestion and previous highs mark the resistance level above the current price. It considers bearish and detrimental to the overall trend when a break below support. It considers bullish and positive for the overall trend when a break above resistance.
Momentum- It is the fact which is generally measure with MACD like the oscillator. The momentum is considered bullish or improving when MACD goes above the 9-day exponential moving average (NYSEMKT:EMA) or positive.
Trading pressure- an indicator uses the available volume figure of shares and indices to measure the buying and/or selling pressure. Buying pressure is dominant when the money flow is above the zero and selling pressure is dominant when it is below zero.
Relative strength- dividing the security forms the price relative line by a benchmark. It is usual the share price to be divided by the S&P 500. The line plotted over a period of time will introduce us with the performance of the share that is outperforming (rising) or underperforming (falling).
Once you summarize the above details of the shares with the technical indicators then you will get the strength of the current trend, maturity or stage of the current trend, potential entry levels for new long position and reward to risk ratio of a new position. If you are facing trouble in analyzing the technical indicators then you can take help from experts. We are the leading financial consultancy company providing share market tips for the successful share market trading. Our analyst team of experts generates share market tips after analyzing technical tools and provide that on time so that traders cannot overlook even a single the market opportunity.