This entry was posted on Friday, October 17th, 2008 at 5:44 pm and is filed under Introduction to Technical Analysis. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
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October 17, 2008
One of the tenets of Technical Analysis is that prices follow trends, either upwards, downwards or sideways (when the price is generally holding steady – a “flat” price). If investors spot an upward trend in a share, they may well try to jump on the band-wagon and buy that share, hoping to benefit from its rise, and thereby driving its price up further. Similarly, a downward trend may cause investors to dump shares on the market, causing a further fall in the price. This can cause the price to “zig-zag” – rise and fall several times in line with investor confidence.
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