BULLS, BEARS AND STAGS

The terms ‘Bull market’ and ‘Bear market’ are derived from the way those animals attack. Bulls are supposed to be aggressive and attacking while bears would wait for the prey to come down.

BULL MARKETS

When the prices of stocks moves up rapidly cracking previous highs, it is assume as a bull market. If there are many bullish days in a row, it is considered as a ‘bull market run’. Technically a bull market is a rise in value of the market by at least 20%.

BEAR MARKETS

A bear market is the opposite of a bull market. When the prices of stocks moves crashes rapidly cracking previous lows, it is assume as a bear market. Generally markets must fall by more than 20% to confirm that it’ a bear market.

STAGS

This is another category of market participant. The stags are not interested in a bull run or a bear run. Their aim is to buy and sell the shares in very short intervals and make a profit from the fluctuation. It’s a daily tussle for stags in the stock market.

Relative Strength Index

The Relative Strength Index (RSI) is one of the principal momentum indicators used when analyzing charts.

RSI works best when it's compared to short-term moving-average (MA) crossovers. Using a 10-day MA with a 25-day MA, you may find that the crossovers indicating a shift in direction will occur very close to the times when the RSI is either in the 30/70 or 20/80 range; the times when it is showing either distinct overbought or oversold readings. Simply put, the RSI, sooner than almost anything else, indicates an upcoming reversal of a trend, either up or down.

Stochastics: An Accurate Buy And Sell Indicator

The K line is the fastest and the D line is the slower of the two lines. The investor needs to watch as the D line and the price of the issue begin to change and move into either the overbought (over the 80 line) or the oversold (under the 20 line) positions. The investor needs to consider selling the stock when the indicator moves above the 80 level. Conversely, the investor needs to consider buying an issue that is below the 20 line and is starting to move up with increased volume.

Stochastics is a favorite indicator of some technicians because of the accuracy of its findings. It is easily perceived both by seasoned veterans and new technicians, and it tends to help all investors make good entry and exit decisions on their holdings.

Fibonacci Numbers

Fibonacci Numbers: The Golden Ratio and the Golden Spiral

The more you learn about Fibonacci, the more amazed you will be at its importance

If you've studied the financial markets, even for a short time, you've probably heard the term "Fibonacci numbers." The ratios and relationships derived from this mathematical sequence are applied to the markets to help determine targets and retracement levels.

Did you know that Fibonacci numbers are found in nature as well? In fact, we can see examples of the Fibonacci sequence all around us, from the ebb and flow of ocean tides to the shape of a seashell. Even our human bodies are examples of Fibonacci.

Major Factors That Affect the Stock Market

Following are the major factors that affect the Stock Market

What is Technical Analysis?

Technical Analysis is the forecasting of future financial price movements based on an examination of past price movements. Like weather forecasting, technical analysis does not result in absolute predictions about the future. Instead, technical analysis can help investors anticipate what is "likely" to happen to prices over time. Technical analysis uses a wide variety of charts that show price over time.

Support and Resistance Basics

The concepts of support and resistance are undoubtedly two of the most highly discussed attributes of technical analysis and they are often regarded as a subject that is complex by those who are just learning to trade.

These terms are used by traders to refer to price levels on charts that tend to act as barriers from preventing the price of an asset from getting pushed in a certain direction. 

Support and Resistance can come in various forms and it is much more difficult to master than it first appears.

Certain price levels tend to prevent traders from pushing the price of an underlying asset in a certain direction. In this case, traders would call the price level a level of resistance. Resistance levels are also regarded as a ceiling because these price levels prevent the market from moving prices upward. 

We have price levels that are known as support. This terminology refers to prices on a chart that tend to act as a floor by preventing the price of an asset from being pushed downward. The ability to identify a level of support can also coincide with a good buying opportunity because this is generally the area where market participants see good value and start to push prices higher again.