A stock market graph visually represents the price movements of stocks over a specific period. Typically displayed on a coordinate plane with time on the x-axis and price on the y-axis, the graph provides a snapshot of how a particular stock or the overall market has performed.
Technical analysis is a method used by investors and traders to evaluate and forecast future price movements based on historical market data. This approach involves studying stock market graphs and applying various technical indicators and chart patterns to identify trends and potential entry or exit points. Technical analysts believe that historical price and volume data can help predict future price movements, as they reflect the collective behavior of market participants.
Key components of technical analysis include trend analysis, support, and resistance levels, moving averages, and various oscillators and momentum indicators. By analyzing these factors, investors aim to make informed decisions about buying or selling stocks. However, it’s important to note that technical analysis is just one approach, and investors often use a combination of technical and fundamental analysis for a more comprehensive understanding of the market and individual stocks.