Why Technicals ?
The rational behind investment in shares and stocks can simply be defined in one small sentence " to make money by capitalizing on fluctuation in prices". Therefore, we have to assume that a common investor, while investing in a script is devoid of any sentiment and is directed with one simple goal of 'Profit objective'. With objective being defined we now come to a more difficult task of determining as to how the objective can be achieved.
The achievement of profit objective presupposes prevalence of analysis in order to decipher, in advance, correctly and comprehensively, the development of price trends/movements. To put it in simple words, one must correctly gauge as to which scripts will fetch better prices in near future or which will soon counter a nose dive in terms of prices so that one can sell in advance to cover the sale at a lower price and earn margin out of the difference.
Any form of market, that includes Capital market too, comprises of market dynamics of demand supply interaction. Pivotal in the form of net worth, eps, P/E ratio etc provide the basic market platform for scripts or levels where demand and supply factors may interact. However, the fluctuation in prices of scripts, we shall observe, follow metamorphosis various other economic factors/ principles which co-ordinate to bring about the state of equilibrium arising out of aforesaid interaction.
Over the years the factors that influence development of market trends have been consolidated in the form of Technical studies and in the backdrop of modern era of technological advancement, have been interalia configured in state of the art software programs that help investors in determining possible development of trends and to profit there from.
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