| Getting accurate stock market analysis is extremely | | | | Charts can present information in many different |
| important if you want to be able to forecast which | | | | formats. An Open-High-Low-Close chart or OHLC bar |
| way the market is going to move. To do this, you | | | | chart shows the span of the high and low prices |
| need to have technical analysis that looks at price | | | | during a particular trading time as a vertical line. The |
| movements and trends. This is mainly done by | | | | open and close prices are shown as small horizontal |
| looking at price charts and performing a chart | | | | ticks off the vertical line. A tick to the left is the |
| analysis. There are many ways to get technical | | | | open price, and a tick to the right is the close price. A |
| analysis such as candlestick charting, the Elliot wave | | | | candlestick chart is similar to the OHLC chart, but |
| theory, or the Dow Theory. The differences | | | | uses candlestick shaped imagery. The top and |
| between fundamental analysis and technical analysis is | | | | bottom ends of the candle show the open and close |
| that the former looks at the facts of the market | | | | price for the stock. Colors are used to provide |
| company currency or commodity. Technical analysis | | | | further information. If the candle is black in color, it |
| looks only at price and volume information found in | | | | indicates the stock closed at a lower price than it |
| charts. | | | | opened. If a white candle is shown, it means the |
| When it comes to stock market analysis, it is said | | | | stock closed higher than it opened. |
| that by looking at the history of a stock's trading | | | | While using charts is common practice, it is not the |
| activity, you will find all the relevant information you | | | | only source for information that technical analysts are |
| need. This is because price action repeats itself as a | | | | limited to using for stock market analysis. Looking at |
| result of investors patterned behavior. Technical | | | | surveys on investor sentiment provides valuable |
| analysts believe that prices trend directionally. This | | | | information on whether investors are feeling bullish or |
| could be up, down, flat or a combination of all. A | | | | bearish. With this information, they can see if a trend |
| series of lower highs and lower lows would be an | | | | will continue or if a reversal will occur. A number of |
| indication of a downtrend. Using a candlestick chart | | | | analysts go beyond using only technical analysis and |
| is the best way to see this information. Many | | | | look to combine other market information. For |
| technical analysts use candlestick charts because | | | | example, John Bollinger termed the phrase rational |
| they can identify trends quickly and easily when | | | | analysis for the intersection of fundamental and |
| looking at the chart. | | | | technical analysis. |