Definition

Noun: 1. A method of evaluating securities and forecasting their future price movements by analyzing statistics generated by market activity, such as past prices and trading volume. This approach focuses on the study of price charts and technical indicators, operating on the principle that historical trading activity and price changes can indicate future trends.

Usage

• Technical analysis is widely used by traders to identify potential entry and exit points for trades.
• Many investors combine technical analysis with fundamental analysis to make more informed decisions.
• The primary tool of technical analysis is the price chart.

Examples

• "She relied on technical analysis to decide when to buy the stock, carefully studying its moving averages and support levels."
• "A core belief in technical analysis is that market psychology influences price patterns, which tend to repeat over time."
• "Critics argue that technical analysis is not a reliable forecasting tool because past performance does not guarantee future results."

Advanced Usage

• Technical analysis of stocks/shares/forex/commodities: Specifies the market or asset class being analyzed.
  • His book focuses on the technical analysis of forex markets.
• To perform/conduct/use technical analysis: Common verbs describing the action.
  • The firm uses algorithms to perform technical analysis on vast datasets.

Variants and Related Words

• Technical Analyst (n): A person who practices technical analysis.
  • The technical analyst identified a head-and-shoulders pattern on the chart.
• Technically (adv): In a way that relates to technical analysis.
  • The asset is technically overbought according to the RSI indicator.

Synonyms

• Chart analysis: Emphasizes the use of price charts.
• Trend analysis: Highlights the focus on identifying market trends.

Related Phrases

• Technical indicator: A mathematical calculation based on price, volume, or open interest used to forecast price movements (e.g., Moving Average, RSI).
  • The MACD is a popular technical indicator.
• Technical breakout: When a price moves above a resistance level or below a support level, often seen as a signal by technical analysts.
  • The stock experienced a technical breakout and surged 5%.

Noun

1. (stock exchange) analysis of past price changes in the hope of forecasting future price changes