Welcome to this beginner’s guide on technical analysis in the share market. If you’re interested in learning how to assess stock prices and make well-informed investment decisions, you’ve come to the right place.
In this guide, we will talk about technical analysis, breaking down its meaning, purpose, types, and how it can be a valuable tool in your investment journey.
Technical analysis of stocks is a method used to evaluate and predict future price movements of stocks, commodities, or any financial instrument by analysing historical price charts, volume data, and various technical indicators. It’s like studying the past behaviour of a stock to make informed decisions about its future behaviour.
Additional Read: What Is a Candlestick Pattern?
The stock market can seem confusing with all its numbers, charts, and jargon, but technical analysis is like a map that helps you find your way. Instead of focusing on the intrinsic value of a company, as fundamental analysis does, technical analysis of stocks concentrates on the study of price patterns, trends, and market sentiment.
Imagine you’re considering buying shares of Company X. Instead of examining their financial reports and earnings projections (which is what fundamental analysis does), you’d analyse Company X’s historical stock price movements, looking for patterns, support and resistance levels, and other technical indicators. This analysis helps you make more informed buy or sell decisions.
Additional Read: What is Inverted Hammer?
Additional Read: Hammer Candlestick Pattern
Charts are the foundation of the technical analysis of stocks. They are graphical representations of a stock’s price movements over time. In India, common chart types include candlestick charts, bar charts, and line charts. Among these, candlestick charts are favoured for their ability to convey a wealth of information in a visually appealing way.
Candlestick charts use coloured candles to represent price movements during a specified time period. A green or white candle typically represents a bullish (upward) movement, while a red or black candle signifies a bearish (downward) movement.
Additional Read: Morning Star Candlestick Pattern
Additional Read: What is Pyramid trading?
It proves to be a valuable tool for investors in the Indian stock market. While it doesn’t guarantee success, it provides insights from historical data to guide your decisions. As you begin your investment journey, remember to blend technical analysis of the share market with other strategies, exercise risk management, and continue your learning.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only.
Share this article:
Share Market Today | Gift Nifty Positive, US Markets Soar
16 May, 2024 | 5 Min. read
Commodities Market Today | Crude Up by 0.78%
16 May, 2024 | 1 Min. read
Gold Rate Today | Gold Prices Rally, Up 1.2%
16 May, 2024 | 2 Min. read
Upcoming Q4 Results Today | M&M, HAL, GAIL, Concor, Biocon
16 May, 2024 | 3 Min. read
Coal India & NMDC Explore Lithium Mines in Chile and Australia
16 May, 2024 | 2 Min. read
Centre Slashes Windfall Tax on Crude from ₹8,200 to ₹5,700/MT
16 May, 2024 | 2 Min. read
Thermax Eyes Green Hydrogen as Key Investment Segment
16 May, 2024 | 2 Min. read
Mastering Indian Intraday Trading: Strategies & Tips
16 May, 2024 | 5 Min. read
Understanding Insider Trading: SEBI Regulations, Reasons, and Punishments
16 May, 2024 | 5 Min. read
Best Real Estate Stocks in India
16 May, 2024 | 5 Min. read
Discover Best Stocks Under Rs. 100
16 May, 2024 | 4 Min. read
Mastering Stock Market Trends: Understanding and Applying Trend Analysis Technique
16 May, 2024 | 4 Min. read
Analysis to Become a Pro Investor
28 Dec, 2023 | 4 Min. read
Women In Real Estate Investing (Investree)
28 Dec, 2023 | 5 Min. read
How To Check Prudent Corporate Advisory IPO Allotment Status
27 Dec, 2023 | 3 Min. read
How To Boost Credit Score? – Steps to Improve Creditworthiness
27 Dec, 2023 | 4 Min. read
Advantages and Disadvantages of Opening Multiple Demat Accounts
26 Dec, 2023 | 4 Min. read
7th CPC LTC: Leave Travel Concession Rules for Central Government Employees
26 Dec, 2023 | 4 Min. read
7th Pay Commission: House Building Advance (HBA) Interest Rate FY 2023-24
26 Dec, 2023 | 5 Min. read
The Future of Trading: Exploring Bajaj Broking’s Demat Features
26 Dec, 2023 | 6 Min. read
7th Central Pay Commission Cpc Fitment Table
23 Dec, 2023 | 7 Min. read
Level up your stock market experience: Download the Bajaj Broking App for effortless investing and trading