CHAPTER 14 Technical Analysis
Introduction
There are two main approaches to analyzing stocks: fundamental analysis and technical analysis. Fundamental analysis looks at economic, industry, and firm factors to determine the intrinsic value of a stock or index and whether it is underpriced (buy decision) or overpriced (sell decision). Technical analysis, on the other hand, looks for patterns or trends in security prices. Different from fundamental analysis that uses economic, industry, and company data, technical analysis looks at just market data: high and low prices, closing prices, volume, moving averages, short interests, and volatility.
As an alternative approach to fundamental analysis, technical analysis is based on the premise that ...
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