TECHNICAL ANALYSIS

PRESENTED
BY:
 TECHNICAL ANALYSIS

• It is the process of identifying trend

reversal at an early stage to
formulate the buying and selling
strategy.
 ASSUMPTIONS

• Market value of scrip is determined

by demand and supply.
• Market discounts everything.
• Market always moves in a trend.
• History repeats itself.
 TECHNICAL TOOLS

• DOW THEORY
• VOLUME OF TRADING
• SHORT SELLING
• ODD LOT TRADING
• CHARTS
• MOVING AVERAGE
• OSCILLATORS
 DOW THEORY

• ASSUMPTIONS

No single individual can affect the major trend of market.

Market discounts everything.
It is not a tool to beat market but provides a way to
understand it.
 TREND

Primary Intermediat Short

trend e trend term
trend
 PRIMARY TREND

BULL BEAR
MARKET MARKET

P P
R R
I I
C C
E E

DAYS
DAYS
SECONDRY TREND

SECONDRY
CORRECTION
S

P
R
I
C
E

DAYS
 MINOR TREND

• DAY TO DAY FLUCTUATIONS

 VOLUME OF TRADE

• Volume expands in bull market

• Volume narrows in bear market
 BREADTH OF
MARKET
• Difference between advances and
decline

No. of No. of shares

shares whose price
whose price has been
has been fallen
increased
 SHORT SALES

• Selling of shares that are not owned.

• Investors sells them in the hope
purchase them at low price.
 ODD LOT TRADING

• When shares are traded below hundred.

• Such traders are known as odd lotters.
• When they dominate, market is considered weak.
• Do not move market at peak but at bottom.
 MOVING AVERAGE

• Market do not rise and fall in straight

line.
• To smoothen data moving average is
used.
 OSCILLATORS

• Indicate market or share momentum.

• Share price movement from one
extreme to another.
• Signal possible trend reversal.
 RELATIVE STRENGTH
INDEX

• RSI = 100-(100+RS)
1
• RS = Average gain per day
Average loss per
day
 CHARTS

• Chart is a graphical representation of

datawhich helps investor to find out
the trend of price without any
difficulty.
 DIFF. BETWEEN TECHNICAL
AND FUNDAMENTAL
ANALYSIS

 TECHNICAL ANALYSIS  FUNDAMENTAL ANALYSIS

• Focus on financial strengh, earning,

• Focus on past history of profitablity of corporate.
prices.
• Predict long term price movement.

• Predict short term price • Committed to buy or hold policy.

movement.

• Not committed to buy or hold • Forecast demand and supply by

policy. studying price and volume of
trading.

• Forecast demand and supply

on various factors.
 THANKS

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