{"id":2504,"date":"2018-09-24T09:00:00","date_gmt":"2018-09-24T03:30:00","guid":{"rendered":"http:\/\/capitalante.com\/?p=2504"},"modified":"2019-02-26T19:24:47","modified_gmt":"2019-02-26T13:54:47","slug":"technical-analysis-of-stocks","status":"publish","type":"post","link":"https:\/\/capitalante.com\/technical-analysis-of-stocks\/","title":{"rendered":"Technical Analysis of Stocks For Beginners"},"content":{"rendered":"<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Technical analysis of stocks is a complicated jargon for stock market beginners. This is a strategy to predict the future price of stocks after checking the past and current price movement action of the stock. Technical analysis reveals a stock\u2019s strength and weakness and hints future changes in price whether upward or downward. The change of price of a stock is a constant matter and the change in price is influenced by a variety of economic, monetary, political and psychological forces. In other <g class=\"gr_ gr_108 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"108\" data-gr-id=\"108\">words<\/g> the impact of these external forces or news will quickly show in a form of price movement either upwards or downwards. Technical analysis of stocks focuses on what is happening instead of why it is happening. Pure technical analysts are concerned about the trends implied by the past date price movements in the charts, indicators etc.<\/span><\/p>\n<h6 style=\"text-align: center;\"><span style=\"color: #0000ff; font-family: georgia, palatino, serif;\"><span style=\"font-size: 18.6667px;\"><b>How to do Technical Analysis of Stocks<\/b><\/span><\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Technical analysis of stocks is done by following components:<\/span><\/p>\n<ul>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Charts, price <g class=\"gr_ gr_81 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"81\" data-gr-id=\"81\">behaviour<\/g> in the past.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Analysis due to the news and making <g class=\"gr_ gr_76 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins doubleReplace replaceWithoutSep\" id=\"76\" data-gr-id=\"76\">assumption<\/g> of the news to predict future price change either upward or downward.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Concentrate on stop loss, support, resistance, MACD Charts.<\/span><\/li>\n<\/ul>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #0000ff;\"><strong>Charts, price <g class=\"gr_ gr_87 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"87\" data-gr-id=\"87\">behaviour<\/g> in the past<\/strong><\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">First of <g class=\"gr_ gr_150 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"150\" data-gr-id=\"150\">all<\/g> <g class=\"gr_ gr_88 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"88\" data-gr-id=\"88\">analyse<\/g> the charts of a stock carefully. Price <g class=\"gr_ gr_89 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"89\" data-gr-id=\"89\">behaviour<\/g> means how a stock\u2019s value goes ups and downs for the whole years and these ups and downs are depicted in a chart. Suppose a company has performed well and given stellar performance due to strong sales on the occasion of Dhanteras or Dewali as it offers discounts on its products. In this festive <g class=\"gr_ gr_85 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"85\" data-gr-id=\"85\">season<\/g> the sale of the company increases leading to a good profit margin for the company.<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">It is seen that every year the company gains <g class=\"gr_ gr_117 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"117\" data-gr-id=\"117\">huge<\/g> profit in that specific quarter due to increased sales. Consequently, after quarterly results the company\u2019s share price spikes from 12%-17% in a single day. Sometimes later, the stock does not move upward so much. This is the stock\u2019s price <g class=\"gr_ gr_120 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"120\" data-gr-id=\"120\">behaviour<\/g>. This price <g class=\"gr_ gr_121 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"121\" data-gr-id=\"121\">behaviour<\/g> is depicted in a chart. <g class=\"gr_ gr_118 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"118\" data-gr-id=\"118\">Obviously<\/g> it is a smart act to buy the specific stock just before that festive season or it announces its quarterly results. When the stock\u2019s price spikes up at the time of festive season or after the quarterly results, then you should book the profit and earn a satisfactory return.<\/span><\/p>\n<ul>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\"><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Read also:<span style=\"color: #ff0000;\">\u00a0<\/span><\/span><\/span><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #ff0000;\"><a href=\"https:\/\/www.investopedia.com\/articles\/active-trading\/102914\/technical-analysis-strategies-beginners.asp\" ping=\"\/url?sa=t&amp;source=web&amp;rct=j&amp;url=https:\/\/www.investopedia.com\/articles\/active-trading\/102914\/technical-analysis-strategies-beginners.asp&amp;ved=2ahUKEwi_qvLRkP_dAhVSeH0KHRs5DD8QFjAAegQIChAB\" style=\"color: #ff0000;\" target=\"_blank\" rel=\"noopener\"><\/a><a href=\"https:\/\/www.investopedia.com\/articles\/active-trading\/102914\/technical-analysis-strategies-beginners.asp\" target=\"_blank\" rel=\"noopener noreferrer\" style=\"color: #ff0000;\">Technical Analysis Strategies for Beginners | Investopedia<\/a><\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\"><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">Read also:<span style=\"color: #ff0000;\">\u00a0<\/span><\/span><\/span><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #ff0000;\"><a href=\"https:\/\/www.fidelity.com\/learning-center\/trading-investing\/technical-analysis\/introduction-technical-analysis\/overview\" ping=\"\/url?sa=t&amp;source=web&amp;rct=j&amp;url=https:\/\/www.fidelity.com\/learning-center\/trading-investing\/technical-analysis\/introduction-technical-analysis\/overview&amp;ved=2ahUKEwi_qvLRkP_dAhVSeH0KHRs5DD8QFjALegQICxAB\" style=\"color: #ff0000;\" target=\"_blank\" rel=\"noopener\"><\/a><a href=\"https:\/\/www.fidelity.com\/learning-center\/trading-investing\/technical-analysis\/introduction-technical-analysis\/overview\" target=\"_blank\" style=\"color: #ff0000;\" rel=\"noopener noreferrer\">Beginners guide to technical analysis &#8211; Fidelity Investments<\/a><\/span><\/li>\n<\/ul>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #0000ff;\"><strong><g class=\"gr_ gr_135 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"135\" data-gr-id=\"135\">Analyse<\/g> the news<\/strong><\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\"><g class=\"gr_ gr_174 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"174\" data-gr-id=\"174\">Analyse<\/g> the news you receive from different sources. Suppose weather department forecasts there will be a normal monsoon this year. Just use your intelligence here. <g class=\"gr_ gr_129 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"129\" data-gr-id=\"129\">Good<\/g> monsoon means good agricultural productivity. Consequently, farmers associated with agriculture will get <g class=\"gr_ gr_130 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"130\" data-gr-id=\"130\">fair<\/g> price of their agricultural <g class=\"gr_ gr_134 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling\" id=\"134\" data-gr-id=\"134\">product<\/g> and this will increase their purchasing power.\u00a0The increased purchase power of farmers will create higher rural demand and there will be more money flow in the economy. The direct beneficiaries for this situation will be FMCG, Auto companies i.e., two wheeler companies etc. So as an investor of these sectors you may be profited.<\/span><\/p>\n<h6><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #0000ff;\"><strong><g class=\"gr_ gr_140 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling multiReplace\" id=\"140\" data-gr-id=\"140\">Analyse<\/g> Support, Resistance &amp; Stop loss<\/strong><\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">An important part of Technical analysis of stocks is to follow the support and resistance which are directly related to supply and demand. Let\u2019s illustrate this with an example. There is a stock costing Rs. 100 per share. Now the price will uniformly move upwards and downwards frequently. It is seen that it does not come down below Rs. 90\/- per share and upwards it keeps its movements. So Rs. 90\/- per share <g class=\"gr_ gr_79 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling ins-del\" id=\"79\" data-gr-id=\"79\">is<\/g> the respective stock\u2019s support level. Again the price of the same stock moves around Rs. 100\/- per share and tends to move downward direction. So we can conclude that Rs. 100\/- per share is its strong resistance.<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">After one month or two <g class=\"gr_ gr_110 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar multiReplace\" id=\"110\" data-gr-id=\"110\">month<\/g> or more when it breaks the immediate resistance of Rs.100\/- per share and rallies to Rs.130\/- per share, it does not trade below Rs. 125\/-per share further. Then it <g class=\"gr_ gr_112 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar multiReplace\" id=\"112\" data-gr-id=\"112\">move<\/g> <g class=\"gr_ gr_116 gr-alert gr_spell gr_inline_cards gr_run_anim ContextualSpelling\" id=\"116\" data-gr-id=\"116\">downward<\/g> when it reaches Rs. 140\/-per share. So the stock\u2019s new support becomes Rs.125 per share and then the new immediate resistance changes to Rs. 140\/-per share. In this <g class=\"gr_ gr_114 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"114\" data-gr-id=\"114\">way<\/g> you can calculate the stock\u2019s support and resistance point.<\/span><\/p>\n<p><img loading=\"lazy\" src=\"http:\/\/capitalante.com\/wp-content\/uploads\/2018\/09\/stock-exchange-680583_960_720-Copy.jpg\" alt=\"Technical analysis of stocks\" width=\"960\" height=\"678\" class=\"size-full wp-image-3332 aligncenter\" srcset=\"https:\/\/capitalante.com\/wp-content\/uploads\/2018\/09\/stock-exchange-680583_960_720-Copy.jpg 960w, https:\/\/capitalante.com\/wp-content\/uploads\/2018\/09\/stock-exchange-680583_960_720-Copy-300x212.jpg 300w, https:\/\/capitalante.com\/wp-content\/uploads\/2018\/09\/stock-exchange-680583_960_720-Copy-768x542.jpg 768w\" sizes=\"(max-width: 960px) 100vw, 960px\" \/><\/p>\n<h6><span style=\"color: #0000ff; font-family: georgia, palatino, serif;\"><span style=\"font-size: 18.6667px;\"><b>Caution to take<\/b><\/span><\/span><\/h6>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">You have to be cautious about <g class=\"gr_ gr_93 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"93\" data-gr-id=\"93\">price<\/g> movement of the stocks. So while trading you need to set a stop loss to counter any price movement in <g class=\"gr_ gr_92 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins doubleReplace replaceWithoutSep\" id=\"92\" data-gr-id=\"92\">downward<\/g> direction to minimize your loss while trading. Suppose a stock has <g class=\"gr_ gr_91 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-del replaceWithoutSep\" id=\"91\" data-gr-id=\"91\">a support<\/g> at Rs.90\/- per share that means it never goes below this price. If by chance it goes below this it immediately recovers its value from that point. Now you can fix a stop loss point at Rs.90\/- or Rs.95\/-, so on any declining <g class=\"gr_ gr_94 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"94\" data-gr-id=\"94\">movement<\/g> you can minimize the loss.<\/span><\/p>\n<ul>\n<li><span style=\"font-family: georgia, palatino, serif; color: #000000; font-size: 14pt;\">Read also:<span style=\"color: #ff0000;\">\u00a0<a class=\"blog-item-title-link\" href=\"http:\/\/capitalante.com\/fundamental-analysis-of-stocks-step-by-step\/\" title=\"Fundamental Analysis of Stocks Step by Step\" rel=\"bookmark noopener noreferrer\" target=\"_blank\" style=\"color: #ff0000;\">Fundamental Analysis of Stocks Step by Step<\/a><\/span><\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif; color: #000000; font-size: 14pt;\">Read also:<span style=\"color: #ff0000;\">\u00a0<a href=\"http:\/\/capitalante.com\/how-to-identify-the-quality-mid-cap-and-small-cap-stocks\/\" title=\"How to Identify the Quality Mid-cap and Small-cap Stocks\" rel=\"bookmark noopener noreferrer\" target=\"_blank\" style=\"color: #ff0000;\">How to Identify the Quality Mid-cap and Small-cap Stocks<\/a><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #000000;\">So, this was the detailed discussion on how to make <g class=\"gr_ gr_96 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"96\" data-gr-id=\"96\">technical<\/g> analysis of a stock or a company. <g class=\"gr_ gr_98 gr-alert gr_gramm gr_inline_cards gr_run_anim Punctuation only-ins replaceWithoutSep\" id=\"98\" data-gr-id=\"98\">Generally<\/g> a stock possesses these features. By following these steps you can easily understand a stock\u2019s nature and its movements. Then you can invest in that stock and make <g class=\"gr_ gr_97 gr-alert gr_gramm gr_inline_cards gr_run_anim Grammar only-ins replaceWithoutSep\" id=\"97\" data-gr-id=\"97\">profit<\/g>.<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt; color: #0000ff;\">Do you have any questions about Technical analysis of stocks? Please leave a comment and if you loved the post then like and share.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Technical analysis of stocks is a complicated jargon for stock market beginners. This is a strategy to predict the future price of stocks after checking the past and current price movement action of the stock. Technical analysis reveals a stock\u2019s &#8230; <\/p>\n<p class=\"read-more-container\"><a title=\"Technical Analysis of Stocks For Beginners\" class=\"read-more button\" href=\"https:\/\/capitalante.com\/technical-analysis-of-stocks\/#more-2504\">Continue Reading<span class=\"screen-reader-text\">Technical Analysis of Stocks For Beginners<\/span><\/a><\/p>\n","protected":false},"author":6,"featured_media":3325,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[16],"tags":[],"_links":{"self":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/posts\/2504"}],"collection":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/comments?post=2504"}],"version-history":[{"count":0,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/posts\/2504\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/media\/3325"}],"wp:attachment":[{"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/media?parent=2504"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/categories?post=2504"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/capitalante.com\/wp-json\/wp\/v2\/tags?post=2504"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}