What is Support ?

Support can be defined as a level from which a stock tends to bounce back. Its a level which indicates that the stock is likely to witness some fresh buying, and some upside is possible in the next coming days. Its is an awareness of patterns associated with support zones (areas usually associated with previous trading ranges, in which prices find support against further decline) enables investors to more accurately define the direction of significant market trends. Such patterns also suggest areas in which price reversals are likely to take place.

Stock never advance in a straight line, they tend to go up in a series of advance’s, flat or retracement period, further advance, another flat or retracement period, and so forth.

Identifying the support level of stock is merely done by looking at the last 3-4 low’s of the stock from which it bounced back, but it takes some practice and is somewhat subjective because there are points that can be considered weak support or resistance and strong support or resistance. Supports are areas where prices tend to consolidate and reverse. Support provides support to prices that are declining.

Determining the strength of the Support levels also plays an important, this is done by counting how many times did the stock price hold prices from dipping further, in other words counting the number of times the stock bounced back from its support levels, The more times it appreciated, the stronger and more significant the support point.

As seen in the left hand side chart, it shows the support level of Idea, it faced strong support around 48 levels, it manged to touch that level nearly 4-5 times, in a series.

Once it made a close above 49-50, it made a high of 62, this indicates the importance of a support levels, but if the stock would have gone below is support level of 48, it could easily see 35 levels. A trader should only make a buy decision once he witnesses some buying interest in the stock.

Any Queries? Comment below, We respond ASAP :) ty

Why Technical Charts & Technical analysis ?

Yes, this is most common question a normal trader would ask, i.e why there is actually a need to use Technical Charts?

In-fact, I too had the same question in mind when I started just started to trade. Well, Technical charts are very useful to any trader who seeks to understand how a stock reacts to previous trends and well as helps him to foresee future events for a stock.

Imagine, if you wanted to look at the price of a script say 4-5 months ago, yes, you could get the data in a tabular form, but it would be very confusing, as searching for a particular date would be very difficult, on the other had, consider a CandleStick Technical chart, using a chart you could easily browse the stock open, high, low & close rates for a rage of dates. This would also help you know the trend of a particular stock.

Moreover, Technical charts with various Indicators such as RSI, Ichimoku clould and DMA’s can help you predict where a stock is likely to go in the next couple of days and even weeks. Technical charts are also used to predict the entry and exit levels of a asset.

Technicians say that a market’s price reflects all relevant information, so their analysis looks more at “internals” than at “externals” such as news events. Price action also tends to repeat itself because investors collectively tend toward patterned behavior – hence technicians’ focus on identifiable trends and conditions.

Technical analysis is frequently contrasted with fundamental analysis, the study of economic factors that influence prices in financial markets. Technical analysis holds that prices already reflect all such influences before investors are aware of them, hence the study of price action alone. Some traders use technical or fundamental analysis exclusively, while others use both types to make trading decisions.

Users of technical analysis are most often called technicians or market technicians. Some prefer the term technical market analyst or simply market analyst. An older term, chartist, is sometimes used, but as the discipline has expanded and modernized the use of the term chartist has become rare.

Types of Charts
OHLC - Open High Low Close charts plot the high and low of the price movement vertically and the open and close horizontally. Used to graph range and outliers.
Candlestick chart - Similar to OHLC, but open and close are filled. Often Black or Red candles represent a close lower than the open. While White, Green or Blue candles represent a close higher than the open.
Line chart - Connects each closing interval together on a line

Over the past several decades Technical Analysis with quality charts, have proven and given traders more returns on their Investment.

Any Queries? Comment below, We respond ASAP :) ty

What is a Technical Chart ?

Welcome to our Charting Pathshala, this has been made to help you understand and interpret Technical Charts better. It is rightly said that technical chart indicators will help you unlock many trading opportunities which in-turn can help you increase you profits. There are more than 100 of Technical Indicators that are available today, and some of them are better than others.

Normally Technical Indicators are used with conjunction with one another for best results for for good buy and sell signals.

A Technical Chart is a image or a tool showing you the trend of a particular stock, Technical charts are build using the all or one of the 4 parameters for a particular stock, these parameters mainly include the open, high, low and close of a particular stock for a particular time period (say a minute of a day or a week).

Below is a example of a Technical Chart

Technical Charting has become increasingly popular over the past several years, as more and more people believe that the historical performance of a stock is a strong indication of future performance.

The use of past performance should come as no surprise. People using fundamental analysis have always looked at the past performance of companies by comparing fiscal data from previous quarters and years to determine future growth. The difference lies in the technical analyst’s belief that securities move according to very predictable trends and patterns. These trends continue until something happens to change the trend, and until this change occurs, price levels are predictable.

Any Queries? Comment below, We respond ASAP :) ty