The Importance of Technical Analysis in Indian Share Market


Technical Analysis includes predicting the future price movement of the stocks, currency, commodities as well as bonds. The psychology of the mass investors is to analyze using the historical markets data. This data includes time, price as well as volume.

Importance of Technical Analysis in Stock Market

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The psychology of the mass investor refers to overall optimism of the investor, expectations of the market and pessimism. As these kind of psychological factors move the prices of shares, the technical analysis is concluded as the study of the mass investor psychology.

Technical analyst in Stock Market

The individual performing the Technical Analysis is known as technical analyst. The Technical Analyst used the charts as well as technical indicators for predicting the movement of the future price. The technical analyst is known to forecast the probabilities of the future movements.

Technical analysis comprises of price charts, patterns, volumes, trend lines, indicators and moving averages. There is not a standardized process of technical analysis. An analysts guess would be different from the other analysts guess.

Applying The Concepts of Technical Analysis in Stock Market

The concepts of technical analysis may be applied to the stocks such as Oasis Petroleum, Chevron Corp, Hess Corp, and Exxon Mobil. All these stocks are a part of the energy sector exchange traded funds such as energy select sector SPDR fund..

Brief History of The Technical Analysis

Technical Analysis comes from 17thCentury markets of the Dutch. The candlestick charts used to be a form of the technical analysis which evolved in whole of Asia during 18th century. The candlestick chart techniques are still being employed in analysis of the financial market.

The modern day technical analysis was discovered on the work of Charles Dow. He developed one point and a figure form of the charting analysis. A point and figures chart comprises of the columns stacked with O and X.

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