CFA TECHNICAL ANALYSIS EXPLAINED

What is technical analysis? Technical analysis is the study of financial market action. 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. Hence the name chart analysis. A chartist analyzes price charts only, while the technical analyst studies technical indica- tors derived from price changes in addition to the price charts. Technical analysts examine the price action of the financial markets instead of the funda- mental factors that (seem to) effect market prices.Technicians believe that even if all relevant information of a particular market or stock was available, you still could not pre- dict a precise market "response" to that information. There are so many factors interacting at any one time that it is easy for important ones to be ignored in favor of those that are considered as the "flavor of the day."