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TECHNICAL ANALYSIS

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TECHNICAL ANALYSIS
- Through Technical analysis , we will learn when to sell or buy the stock
known as Entry and Exit points by studying charts and signals from
indicators.

- Helps us to maximize our pro it and minimize losses through logical and
disciplined way.

- Ignores fundamental aspect of the companies and follows the herd

mentality.

- Helps in avoiding the scenario where stock price goes down when you buy
and stock price goes up when you sell.

- Its never 100 percent correct, but we can achieve accuracy of more than
65 % through proper analysis.
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INTRODUCTION TO TECHNICAL ANALYSIS

GOLDEN RULE FOLLOWED BY TECHNICAL ANALYSIS IS :-

1. HISTORY REPEATS ITSELF

2. MARKET ACTION DISCOUNTS EVERYTHING

3. PRICE MOVES IN TRENDS.

- What has happened in the past, is very likely to happen in the future just
in a di erent price range.
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TECHNICAL ANALYSIS
- THERE ARE 2 MAJOR FACTORS TO BE ANALYZED IN TECHNICAL ANALYSIS

1. PRICE
2. VOLUME

TECHNICAL ANALYSIS
PRICE
When we say Price In share Market, We analyze 4 different price of the stock.

Open Price
Day’s High Price
Day’s Low Price
Day’s Close Price

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VOLUME

Volume = No of shares traded in a day.

Bigger the volume means more no. of transactions happened
be it buying or selling.

TECHNICAL ANALYSIS
CHARTS
1. LINE CHART
- Line Chart is drawn by connecting the closing prices.
- It doesn’t account opening price, high price or low price.

TECHNICAL ANALYSIS
CHARTS
2. BAR CHART

Left Bar = Open price

Right Bar = Close price

If Close price is Higher than Open = Color is Blue or Green

If Close Price is Lower than Open = Color is Red

TECHNICAL ANALYSIS
CHARTS
3. CANDLESTICK

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TECHNICAL ANALYSIS
CHARTS
3. CANDLESTICK CHART

VOLUME

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TECHNICAL ANALYSIS
THE STORY OF BULL AND BEAR
Lets understand Stock Market Bull and Bear Fight point of view

It is said that market got its name of Bull and Bear from the way when they
attack their opponent while on a ight

A bull will attack by thrusting its horns up in the air

A Bear will attack by swiping down its palm from up to down with force

In stock Market BULL = BUYER

While BEAR = SELLER

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TECHNICAL ANALYSIS
CANDLESTICK STORY

If the Bulls win the ight at the time of closing, candle will be GREEN

If the Bears win the ight at the time of closing, candle will be RED

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TECHNICAL ANALYSIS
TRENDLINE
Trend :- Trend is nothing but the general direction of the price
movement when plotted on a graph. It consists of upward
moves and downward moves.

• Trend is your friend is Guru Mantra of all Technical Analysts.

Trend-Line :- Is a line drawn joining the price plotted on the
graph

• There are 3 types of Trend-line in Stock Market.

1. UPTREND

2. DOWNTREND

3. SIDEWAYS TREND

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TECHNICAL ANALYSIS
1. UPTREND MARKET MAKES HIGHER HIGH AND HIGHER LOW

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TECHNICAL ANALYSIS
2. DOWNTREND MARKET MAKES LOWER HIGH AND LOWER LOW

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TECHNICAL ANALYSIS
3. SIDEWAYS TREND HIGHS AND LOWS ARE RANGE BOUND

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TECHNICAL ANALYSIS

HOW TO DRAW A TRENDLINE :-

1. You can draw the lower trend line or Support trend-line by joining 2 or more lowest
low in the chart. The most number of touches the better.
2. You can draw the highest trend line or Resistance trend-line by joining 2 more more
highest high in the chart. The most number of touches the better.
3. Never Draw a trend-line cutting the closing price of the candle.

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TECHNICAL ANALYSIS

CLASSIFICATION OF TRENDS

1. PRIMARY TREND - Is Long term Trend ( 9 months and above )

2. SECONDARY TREND - Is Intermediate Trend ( 3 weeks to few months)
3. NEAR TREND - Is Short Term Trend ( 2 to 3 weeks )

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TECHNICAL ANALYSIS

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TECHNICAL ANALYSIS

GENERAL GOLDEN RULES TO FOLLOW LOOKING AT TRENDS FOR BEGINNERS

1. Never SELL in an UPTREND.

2. Nerver BUY in a DOWNTREND
3. Never TRADE in Sideways Trend. ( Not for Traders )

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