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Don’t start investing or trading in stock market without proper knowledge. In Indian stock market or in any stock market few standard terms are used with the relevance of technical analysis. Sharetipsinfo suggest investors or traders must read complete glossary to understand stock market better. Learn basics of stock market with our glossary.
The right to buy a stock or commodity future at a given price before a given date . The owner of the call option is speculating that the price of the stock will go up and is therefore bullish.
A form of Japanese charting that has become popular in the West. A narrow line (shadow) shows the day’s price range. A wider body marks the area between the open and the close. If the close is above the open, the body is white (not filled); if the close is below the open, the body is black (filled).
Chaikin Money Flow (CMF)
An oscillator that helps signal if a stock is undergoing accumulation or distribution .It is calculated from the daily readings of the Accumulation Distribution line .The CMF is unlike a momentum oscillator in that it is not influenced by the daily price change .Instead, the indicator focuses on the location of the close relative to the range for the period (daily or weekly).
This is a moving average of the Accumulation Distribution Line. It was developed by Marc Chaikin. It is created by subtracting a 10 period exponential moving average of the accumulation/distribution line from a 3 period exponential average of it.
When prices trend between two parallel trend line, this is referred to as a channel.
A straight line drawn parallel to the basic trendline. In an uptrend, the channel line slants up to the right and is drawn rally peaks; in a downtrend, the channel line is drawn below price troughs and slants down to the right. Prices often meet resistance at rising channel lines and support at falling channel lines.
Raw materials such as gold, pork bellies, or orange juice. Traders in commodities buy and sell contracts (also called futures) for such materials.
Commodity Channel Index (CCI)
Developed by Donald Lambert, the CCI is an indicator designed to identify cyclical turns in commodities. It may also be applied to stocks or bonds.
A type of chart pattern that occurs in the middle of an existing trend. The previous trend resumes when the pattern is complete. Examples include the rectangle and Pennant continuation patterns.
After an advance, a decline that does not penetrate the low from which the advance began is known as a correction .Also referred to as a retracement, a correction usually retraces 1/3 to 2/3 of the previous advance.
A point on a graph where two lines intersect. Depending on which lines they are , a crossover may indicate a buy or sell signal . For example, the price line crossing above a moving average line may generate a buy signal. Oscillators such as MACD and Chaikin Money Flow experience centerline crossovers.
Cup with Handle
A bullish chart that marks a consolidation period followed by a breakout. The “cup” part of the pattern resembles a rounding bottom, and is followed by a “handle” that acts as a final consolidation before a breakout.
Shares of companies that are highly sensitive to economic performance. Cyclical stocks tend to perform well when the economy is growing and suffer when the economy contracts . Chemical (SRF), auto (Maruti), paper (Ballarpur industries) and steel (Tata steel) represent a few cyclical industries.
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