Important Points for IC 99 - Asset Management Exam
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Chart analysis : The technician looks at price changes that occur on a day-to-day or week-to-week basis or over any other constant time period displayed in graphic form, called charts and hence the name chart analysis.
Dow Theory : According to Charles Dow (Refer the Wall Street Journal, December 19, 1900); "the market is always considered as having three movements, at the same time : i) the narrow movement from day to day, ii) the Short Swing, running from two weeks to a month or more and iii) the main movement, covering at least four years in its duration"
Chart patterns are used to predict the market movements. The basic concepts underlying the chart analysis are : i) persistence of trends, ii) relationship between volume and trend and iii) resistance and support level
There are various bar charts that are used for technical analysis. The most widely or commonly used bar charts are : i) High-low charts, ii) High-low-close charts, iii) Open-high-low-close charts
Line chart is constructed by connecting the closing price of shares or average prices over a period.
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