The analysis of group investor behaviour, as reflected in the patterns of share prices and volumes, indices, exchange rates and other data streams. More commonly known as charting, this consists of carefully examining the share price, and drawing graphs to establish patterns which can then be used to give, buy and sell signals. The primary function of your software is to enable you to do technical analysis by looking at the various line indicators available. These line indicators are listed in alphabetical order in the bottom left-hand corner of your screen under the heading “All Indicators”. If you click on the down-arrow adjacent to this heading you can then select the particular indicator that you want. Technical analysis also involves the observation and analysis of common formations like channel lines, support, resistance, double tops and bottoms, head-and-shoulders and so on. For example, consider the following chart:
This shows a clear “double top” followed by a strong downward trend and then an extended period where the share oscillated between resistance at R480 and support at R360. This type of simple observation of formations and patterns can greatly assist you to buy and sell at the right times.
If viewing this term in a pop-up block within a lecture module or article, use the scroll bar at the bottom to see the whole chart or click to enlarge the image.Disclaimer - All information and data contained within the PDSnet Glossary terms is for informational and educational purposes only. PDSnet makes no representations as to the accuracy, completeness, suitability, or validity, of any information, and shall not be liable for any errors, omissions, or any losses, injuries, or damages arising from its display or use. Information in the PDSnet glossary terms is based on the author’s opinion and experience and should not be considered professional financial investment advice. The ideas and strategies should never be used without first assessing your own personal and financial situation, or without consulting a financial professional. Thoughts and opinions will also change from time to time as more information is accumulated. PDSnet reserves the right to delete any glossary term for any reason.« Back to Glossary Index