Technical Analysis and Technical Indicators

Technical Analysis

The interpretation of market activity using technical analysis provides hints to the investor as it tries to predict the future behavior of the stock price. Generally speaking, the technical investor will use a combination of price, volume and time-sensitive technical indicators to maximize their profits. Technical analysis employs models, strategies and trading rules based on price and volume changes, such as the relative strength index, moving averages, oscillators, price correlations, business and stock market cycles and classically, through recognition of known chart patterns.

Technical analysis of stocks is a method of evaluating the potential performance of a stock by analyzing its historical price and volume data. This approach is based on the belief that a stock's price and volume movements reflect all relevant information about the stock, including market trends, investor sentiment, and fundamental factors affecting the company's performance.

Technical analysis involves the use of various tools and techniques, such as chart patterns, trend lines, moving averages, and technical indicators, to identify patterns and trends in a stock's price and volume data. These tools can help traders and investors to predict future price movements, identify potential buy and sell signals, and set price targets and stop-loss levels.

Technical Indicators

Technical indicators are usually functions of open, high, low and closing prices, trading volume and input parameters. As a result technical indicators usually provide a value that helps anticipate future changes of stock price. Below you may find descriptions of some of the popular technical indicators as well as their calculations, interpretations and practical examples.

Moving Averages
Bollinger Bands
Envelopes
Volume
Relative Strength Index
Fast Stochastic Oscillator
Slow Stochastic Oscillator
Moving Average Convergence Divergence (MACD)
Moving Average Oscillator
Accumulation/Distribution
On Balance Volume
Williams %R

You may plot these and other technical indicators using Stock Predictor