Technical Analysis

Chartist
A Chartist is an investment analyst who uses charts of prices and volumes to forecast the movements in financial markets. This analysis relies on the assumption that historical price movements will repeat themselves in predictable patterns.
Dow Theory
Dow Theory is a theory that a major trend in the stock market must be confirmed by similar movements in the Dow Jones Industrial Average (DJIA) and the Dow Jones Transportation Average (DJTA). According to this theory, a significant trend is not confirmed until both Dow Jones indexes reach new highs or lows; if they do not, the market is likely to fall back to its previous trading range.
Head and Shoulders
In technical analysis of the stock market, 'Head and Shoulders' is a chart pattern that analysts utilize to predict a reversal in the trend of a security's price. Typically, the pattern appears as three peaks: the initial and last peaks are the shoulders, and the highest peak in the middle is the head.
HIGHS
Stocks that have hit higher prices in daily trading compared to prices of the past 52-week period. These highs are typically listed in daily newspapers. Technical analysts consider the ratio between new highs and new lows in the stock market to be significant for forecasting stock market trends.
New High/New Low
Stock prices that have reached their highest or lowest levels within the past year. This data is often published in newspapers and financial websites to indicate companies experiencing significant price changes.
Overbought
A condition where a security or market has seen an unexpectedly sharp price rise, leading to a high probability of a price drop, known as a correction. It indicates that there are few buyers left to push the prices further up.
Oversold
A description of a stock or market that has experienced an unexpectedly sharp price decline and is therefore due, according to some proponents of technical analysis, for an imminent price rise.
Sentiment Indicators
Measures of the bullish or bearish mood of investors. Many technical analysts look at these indicators as contrary indicators; that is, when most investors are bullish, the market is about to drop, and when most are bearish, the market is about to rise.
Stochastic
A stochastic process or variable relies on probabilistic behavior and chance, commonly used in fields like statistics, finance, and engineering to model systems that are inherently random.
Support Level
A support level is a price level at which a security tends to stop falling because there is more demand for the security than supply of the security. It is an important concept in technical analysis used by traders and investors to make informed decisions.
Technical Analysis
Technical analysis is a method of evaluating securities and commodities by analyzing statistics generated by market activity, such as past prices and trading volume. It uses charts and other tools to identify patterns and trends that may predict future price movements.
Technical Rally
A technical rally refers to a short rise in securities or commodities futures prices within a general declining trend. This can occur due to bargain-hunting or traders identifying a support level where prices usually rebound.
Tick
An upward or downward price movement in a security's trades. Technical analysts watch the tick of a stock's successive up or down moves to get a feel of the stock's price trend.
Trend Line
A Trend Line is a line drawn over pivot highs or under pivot lows to show the prevailing direction of price. Trend lines are a visual representation of support and resistance in any timeframe and are used by technical analysts to chart the past direction of a security or commodity future. By identifying these trends, analysts can make informed predictions about future price movements.
Uptrend
An uptrend refers to the general upward direction in the price of a stock, bond, commodity futures contract, or overall market, characterized by higher highs and higher lows over a period.

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