Welcome to one more interesting post on the Technical Analysis the language of the charts. To have a complete knowledge of the TECHNO-FUNDA analysis [i.e. Fundamental and the Technical] i suggest you to go through the previous post of FUNDAMENTAL ANALYSIS which will help you to get the clarity for the entire stock research. Todays post is as follows
How to Do Technical Analysis of Stocks– Step-by-Step Guide for Beginners
WHY TECHNICAL ?
As we are the investor so we are more associated with the Fundamental Analysis however the language of charts is the ultimate guide for making the BUY, SELL, HOLD decision for a particular stock. In the Dynamic and Volatile Markets, the Technicals play an important role in shaping the portfolio. We are here to have a blend of the two analysis for the Ultimate Stock Research.
The factor is of Clarity and in the markets the clarity is must for making firm decisions Fundamentals helps us to get insights of data such as Profit and Loss, Sales, Promoter Holding, Debt so we are aware of the business of the company while the technicals are helpful in the entry exits and profit booking decisions. I suggest you to go through the Fundamental Analysis Post
Weightage as of now [50% Fundamental + 50% Technical = Ultimate Analysis ]
REASONS BAHOT HOTE HAI STOCK PRICE FLUCTUATE HONE MEIN BUT PRICE EK HI HOTA HAI
That’s the reason why Technical Analysis is important
WHICH TECHNICALS SHOULD BE CONSIDERED ?
It depends on the person to person starts from the simple tools like the Trend Lines, Trend Channels, Support and Resistance, etc to the advance indicators like the RS by Bharat trader, RSI, Bollinger Bands, etc. The only matter is Mastering the one not the many as a single tool is sufficient in the Volatile Markets if we know it very well [i.e to master it at an advance level] instead of using too many indicators, tools while mastering none.
Human Mind is of a nature where the mind can understand well if and only if it is crystal clear not by cluttering, using too many tools, indicators clutters the template and confuses the person for making the firm decisions on time.
TIME [SAMAY BADA BALWAAN HAI]
We all had seen the Mahabharat of the B.R.CHOPRA sir where the whole story is revolving around the wheel of the chariot [i.e. Rath] which is denoted as Samay.
Stock Market is also Mahabharat where we came across the good and bad peoples [Good and Bad companies] and [Good and Bad Management] which are always there to make you down.
Making the good decision on the time is the lucky[i.e success in the stock market doesn’t rely on the luck it is completely in the hands of the participants].
TECHNICAL GUIDE
SUPPORT AND RESISTANCE
SO HERE WE CAN SEE THAT THE SUPPORT AND RESISTANCE ARE SHOWN.
When the RESISTANCE becomes SUPPORT then it denotes the STRONG UPTREND (BULL RUN)
When the SUPPORT becomes RESISTANCE then it denotes the STRONG DOWNTREND (BEARISH TREND)
TREND LINES
The one of the simplest tool ever and the simple things works in the markets a great person had said “Simple Things are not Easy” the psychology behind this statement is though the things are simple yet they are difficult to implement, it is the matter of discipline.
RULE
We can cross through the wick of the candle but not through the body of the candle
GREEN CANDLE DENOTES THE BUYING (BULLISH) TREND WHEREAS THE RED CANDLE DENOTES THE SELLING (BEARISH) TREND
45 DEGREE TRENDLINE UPTREND
As we can see that the 45 degree trendline is there on the chart on the daily timeframe so most important is that when this trendline breaks the trend is over. So here as the trendline breaks the downfall starts so it could be considered as the exit parameter.
MOST IMPORTANT IS THE TOUCHPOINTS MORE TOUCH POINTS SO THE TREND IS MORE SIGNIFICANT
TRENDLINES WITH 5 TOUCH POINTS
So in this case the trendline is drawn by using the 5 touchpoints so it denotes the STRONG BULLISH MOMENTUM and when this trendline breaks then the trend overs.
45 DEGREE TRENDLINE DOWNTREND
So in such scenarios we can say that DOWNTREND continues and when this trendline breaks then the TREND IS OVER.
SEE YOU IN THE NEXT POST TILL THEN
STAY HUNGRY STAY BULLISH
