What Is Stock Market Technical Analysis?
Technical Analysis is the approach to the stock market that doesn’t take into account the “value” of a company/commodity, but rather focuses on the analysis of price movements within the stock market. Essentially, this is the study of supply and demand that focuses on spotting trends within the stock market in an attempt to predict the future prices of stocks.
Most stock technical analysis traders utilize a “top-down” approach to the stock market that typically involves the following steps:
1.Broad market analysis (looking at, NASDAQ, S&P 500, Dow Industrials and NYSE trends)
2. Sector Analysis that helps at identifying the strongest and weakest groups/sectors within the market as a whole.
3. Finally, individual stock analysis helps at identifying the strongest and weakest individual stocks within the select groups. Understanding technical analysis can arm you with the tools you need to become a better stock trader.
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