Sunday, June 28, 2020

Technical Analysis- What Is that?


In real life sometimes 'words' are misleading. One such word is here- 'Technical Analysis'.

I feel there is nothing 'Technical' about 'Technical Analysis'. When you read the word Technical Analysis you feel there is something which involves great Engineering or Science or a Complicated Algorithm.

Here is good news. There is nothing complicated in Technical Analysis. 
Actually, it (Technical Analysis) is a study of Market Emotions with the help of Price Action of Stock and Volumes traded (quantity bought and sold). I feel it should be renamed to Emotion's Analysis.

But we shall go by the name Technical Analysis in this article... keeping aside what I feel.

So Technical Analysis is the study of Price and Volumes of stocks or Index or Future or Options or anything that is tradable. Price is plotted on a chart either in the form of a line or candlesticks or bars (more on candlesticks and bars later). This price chart gives us the price movement of stock since it is listed on the stock exchange.

Technical Analysis works or believes in the following principles:

  • Stocks move in trends - Uptrend, Downtrend, and Sideways (Neutral) Trend.
  • The trend continues until its important Support or Resistance is not broken (More on Support and Resistance later).
  • Volumes are important to confirm the trend.
  • Earlier Price movements (patterns) are repeated in the future.
  • Emotions, News can be seen on charts with the help of price movement and volumes.

Technical Analysis is like a Compass that shows direction when you are lost in the jungle. Charts in Technical Analysis helps in identifying where the stock is currently trading as compared to its High Price and Low price.

Support and Resistance on the chart help in making Buying and Selling decisions with less risk and high-profit potential.

Later, any other tools are known as Indicators, Oscillators, and Moving Average are developed. These tools support decisions taken based on Price and Volume.


Technical Analysis can be applied to any stock, Index or any market such as Commodity or Currency.

There is a growing population which is using Technical Analysis to trade the markets.

We have designed a course in the Stock Market and Technical Analysis for those who are starting new in stock markets. I coach my students on all aspects of Technical Analysis and how to trade markets using Technical Analysis.



-----------------------------------------------------------------------------------------------
 Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on the above write-up.
------------------------------------------------------------------------------------------------------------------


Friday, May 22, 2020

Tata Steel Looking Good Buy!

Everyone knows the condition of the metal sector i.e. too bad and there are many reasons behind it like the US-China trade war, CORONA crisis, low demand, etc. However, these things will stop or recover from some point and as per the chart study, Tata Steel is indicating this turning point. Let’s see multiple time frame analysis in brief.

Tata Steel Monthly Chart: As per monthly chart stock has made 3 bottoms earlier first is 130, second-third is around 180, and now it is giving a signal of the fourth bottom. In the month of March, it has broken its important support of 320 and then made a neutral candle in next month. If we see the current month candle then it has not broken the previous candle’s high/low. That means it is trading in a range from this month and we can see a clear scenario on daily, weekly charts.
Tata Steel Weekly Chart: We have drawn a parallel zone i.e. between 300 to 250 and the stock is trading in this range from the last 9 weeks. The last two candles are Doji which means from last 2 weeks neither bulls nor bears. Right now the stock has given closing exactly at the center point of the channel.

Tata Steel Daily Chart: On this time frame we can see a clear picture, the stock is trading in a sideways zone and taking support from its 20 DMA. The stock has resisted four times from 300 and bounce three times from 250. We have to wait for a breakout to 300 or breakdown to 250 then we will get the next trend. Both 20 & 50 DMA’s are coming closer if stocks price cross & closes above both DMA then it will be ready for a breakout.

The strong entry level is around 250 and resistances are 300/320. We have to wait for dip or breakout, it is better if we enter near support. The Risk-Reward ratio will be good near support.



----------------------------------------------------------------------------------------------- Disclaimer: The contents produced here are purely for educational purposes. They should not be construed as buy/sell recommendations. I am not a SEBI registered Analyst or Investment Advisor. Readers are advised to consult their Investment advisor before taking any decisions based on the above write-up.
------------------------------------------------------------------------------------------------------------------