Syndicate
Market Technical Analysis
The technical analysis is based in that the market will provide the best information available about the future evolution that the same will have and that of the securities that comfort it usually when it is a rising market all the shares rise, without any frequent explanations from part of the fundamental analysis to acknowledge the reason and when it is a market whit falling quotations the opposite happens .
An explanation of such market evolution we will find the relation between the offer and the demand when is the basic object of the study for the technical analysis.
Through the technical analysis we try to for see the changes of tendencies of the market which will provoke a decision that will be maintained until a new anticipation in the change of tendency the technical analysis was begun in the past century when the companies had no obligations to give information about their financial statements and practically the only information available was that of the own market ( prices, volumes, etc. ).
Several are the tools that are used in this type of analysis the most important are the graphics or charts and the statistical indications most of them are calculated by using the quotation and volumes of negotiation.
Within what is considered as technical analysis there exists many tools and those that we are going to study as an introduction are the most used apart from the charts and the statistic indicators there are those who use the so called the theory of opposite opinion.
Theory of the opposite opinion ( ODD lot theory ) -This theory is based on the supposition that the small investor always makes incorrect decisions the followers of this theory observe which operations do the small investors make to do just the opposite of them
To know what the small investors do you have to obtain the buying and selling data of small lots, of 100 securities or less the graphic analysis is used often by the investors to try to predict rises and falls in the quotations of the shares.
The main limitation that this method has is that it is base in the study of the evolution that the securities have had up to the present precisely they usually affirm that what has happened on the stock exchange market in the past, doesn’t have to happen again in the future anyway, the “chartists” or graphic analysis considered that this type of analysis has a very high trust and they believe that with it you have the high probability of obtaining important earnings you can do graphics, to analyze a concrete security or a group of securities.