Savings and InvestmentsMarket Timing, Technical Analysis, and Fundamental Analysis |
How does technical analysis work? |
People who use technical analysis may observe certain trends in the movement of the price of a stock, as seen on a graph, that would indicate a buying or selling opportunity. The model doesn’t necessarily consider how “good” the company is, or whether or not its products are of a high quality, or whether the unemployment rate just went up. The primary focus is on analyzing the mathematical variables that may influence the trend in a price of a stock.