Technical Analysis is a method where one studies the market statistics to evaluate the worth of a company.
Instead of assessing the health of the company by relying on its financial statements, it relies upon market trends to predict how a security will perform.It is a method of evaluating stocks by analyzing stock market related activity, such as past prices and volume.
Technical analysts do not attempt to measure a security's intrinsic value, but instead use charts to identify patterns that can suggest future activity.
They believe in the momentum that the scrip/markets gather over a period of time and cashing in on the same. Technical analysts believe that the historical performance of stocks and markets are indications of future performance. This method enables 'short-term' investors to gauge companies who have very good potential to gather increased earnings in the near future.
Monday, April 6, 2009
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