Technical Analysis is a methodology for analyising and forecasting the direction of a Stock’s Price through the study of past market data, primarily price and volume.
A Technical Analysis Indicator is a mathematical calculation that is applied to the Price of a specific stock to anticipate a CHANGE IN PRICE; and consequently, a change in Investor Behaviour or Sentiment of a specific Stock.
Technical Indicators use the common data components of Price, Volume and Time to calculate and illustrate data-driven measurements and conditions like Trends, Patterns, Momentum, and Support/Resistance levels in relationship to Price.
These are the principal characteristics about Technical Analysis:
1. Historical Data: Technical Analysis relies on historical Price and Volume data to identify Patterns and Trends relevant to probable specifically defined future Price Action.
2. Charts and Indicators: Technical Analysts use specific Technical Indicator Charting Tools to identify potential trading opportunities.
3. Market Sentiment: Technical Analysis assumes that all known information is already reflected in the Price of a Stock, and that price movements are influenced by dominant Bullish or Bearish Market Sentiment, commonly known as the “Heard Mentality”.
4. Short-Term Focus: Technical Analysis is most commonly used for short-term trading, but can also be applied to longer-term (Buy & Hold) investment strategies.
Technical Analysis is utilized to assess Stock Market Exchange and Stock Market Index Performance over
a defined Timeframe for the following Stock Exchanges and Stock Indexes:
NYSE including the NYSEARCA Stock Market Exchange
NASDAQ Stock Market Exchange
TSX Stock Market Exchange
NYSE Stock Market Index
S&P 500 Stock Market Index
DOW Stock Market Index
NASDAQ Stock Market Index
RUSSELL 2000 Stock Market Index
TSX Stock Market Index
Technical Analysis is utilized to asses Stock Performance for a specific Stock Ticker or Stock Symbol over
a defined Timeframe.
Technical Analysis is also utilized to asses the following Criteria over a defined Timeframe for a specific
Stock Symbol:
Trend Direction
Trend Momentum
Volatility
Support and Resistance
Overbought or Oversold Conditions
Entry and Exit Points for Trade
These are the principal characteristics about Technical Analysis:
Historical Data: Technical Analysis relies on historical Price and Volume data to identify Patterns
and Trends relevant to probable specifically defined future Price Action.
Charts and Indicators: Technical Analysts use specific Technical Indicator Charting Tools to
identify potential trading opportunities.
Market Sentiment: Technical Analysis assumes that all known information is already reflected in
the Price of a Stock, and that price movements are influenced by dominant Bullish or Bearish
Market Sentiment, commonly known as the “Heard Mentality”.
Short-Term Focus: Technical Analysis is most commonly used for short-term trading, but can
also be applied to longer-term (Buy & Hold) investment strategies.