Technical Analysis Explained - Stock Market Predictions

TECHNICAL ANALYSIS EXPLAINED

Using a perticular stock or equity past history to predict future price movement is how technical analysis is explained. It is intended to take some of the psychology out of the stock screening process. In explaining technical analysis it is important to determine the most important indicators to use. There are literally hundreds of technical analysis types. I believe the most important and relevant indicators are

RSI- or relative strength indicator. It is what its name suggests.

Bollinger Bands - One of my favorite technical indicators. It explains what the upward and downward boundaries of a stocks current "channel" it is in. If a stock is near the upper bollinger band, it may be over bought and visa versa if a stack is near the lower bollinger band.

Moving Averages - Usually in determining when a stock is ready to move, one would use a series of moving averages. How a 5-day, a 15-day and a 50-day moving average interact can tell a great amount about the future of the stock. There are many inexpensive stock market softwares which will comb though all the stocks to find favorable stocks ready to move. Moving averages are a fundamental of technical analysis.

MACD - Explaining this technical analysis indicator can be difficult. Moving average convergence divergence uses the moving averages previously mentioned to determine the stocks likely path in the future. It is also used to represent a stocks likely volatility. A wide divergence between long and short time moving averages portends a stock is likely gathering for a big move! Again stock screening software can be set to find such stocks.

Conclusion

These was a brief introduction into technical analysis. I hope I explained the basics of technical analysis with some clarity.

Stock Market Predictions

◦ Stock Market predictions 2011
◦ Technical Analysis Explained
◦ Fundamental Equity Analysis
◦ Candlestick Reversal Patterns
◦ Descending Triangle
◦ Stock Market Software
◦ Insider Trading Transactions
◦ Stock Market Predictions 2012