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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.
A group of companies that general revenue in similar ways, and tend to rise and fall with the economic cycle. Sectors are commonly broken down into smaller groups called industries. The sectors tracked by the Standard and pores Index are Basic Industries , Financial , Technology , Industrials , Energy , Consumer Staples , Consumer Services , Utilities and Transport/Cyclicals .
Securities and Exchange Commission (SEC)
A federal agency created to regulate and monitor the securities industry. All U.S companies with stock must abide by the SEC rules and regulations and are required to file quarterly status reports.
A condition that indicates a good time to sell a stock. The exact circumstances of the signal will be determined by the indicator that an analyst is using. For example, it’s often considered a sell signal when the RSI crosses down through the 50 level.
Psychological indicators that attempt to measure the degree of bullishness or bearishness in market. These are contrary indicators. Their greatest value is when they reach upper or lower extremes.
A situation where many scared investors exit their positions due to unfavorable news or uncertainty regarding the stock or industry. The dot-com bust positions, often at great losses
A single day pattern that can appear in an uptrend. It opens higher, trades much higher, and then closes near its open. It looks just like the Inverted, Hammer except that it is bearish.
The process of selling a stock with the hope of buying it back at a lower price (sell high, buy low). Short sellers are bearish and believe the price will decline. Short selling involves borrowing stock (usually from the broker) to sell short and using margin to finance the borrowing. If the price of the stock in question advances too far, the short seller will receive a margin call and be required to put up more money. A short squeeze occurs when the price advances so fast that short sellers are forced to cover their positions (buy the stock back), which drives prices even higher.
Also known as a “trigger line”, is a moving average of another indicator that is used to generate simple buy and sell signals. Probably the most used signal line is the one that is built into the MACD Indicator display. The signal line is the exponential moving average of the MACD line. A buy signal is generated when the MACD line crosses above the signal line and a sell signal is generated when the MACD line crosses below the signal line.
A moving average that gives equal weight to each day’s price data.
The number of shares immediately available to buy (bid) or sell (ask). A bid of Rs.54 with a size of 500 would indicate an order to sell 1000 shares at Rs.55
A simple indicator equal to the change in price divided by the number of time periods. A positive slope begins low and rises over time with a steeper rise illustrating a greater slope. A negative slope begins high and declines over time with a steeper decline illustrating a more negative slope.
Candlestick lines that have small bodies with upper and lower shadows tht exceed the length of the body. Spinning tops signal indecision.
The division of a stock into multiple shares. In a 2-for-1 split, the stockholder’s shares will double in quantity, though the value of each stock will be halved. A stock split is usually an attempt to make high stock prices seem more attractive to investors and generally occurs in the face of new highs.
The difference between the bid and the ask. Generally speaking, more liquid (heavy volume) stocks usually have smaller bid/ask spreads. Less stock (light volume) usually has larger spreads. See related: big, ask and size.
A situation that occurs when prices break below support, but soon reverse course and move back above support. Prices are said to “spring” back from their support break and indicate that the bulls are still alive. A spring can also be referred to as a failed (bearish) signal and is considered bullish. Generally, the reversal should occur within 1-3 days of the support break for the failed signal to be considered valid. This is the opposite of an up thrust.
Standard Deviation (volatility)
A statistical term that provides a good indication of volatility. It measures how widely values (closing prices for instance) are dispersed from the average. The larger the difference between the closing prices and the average price, the higher the standard devition will be and the higher the volatility. The closer the closing prices are to the average price, the lower the standard and the lower the volatility.
A momentum indicator developed by George Lane that measures the price of a security relative to the high/low range over a set period of time. The indicator oscillates between 0 and 100, with readings below 20 considered oversold and readings above 80 considered overbought. A 14-period stochastic oscillator reading of 30 would indicate that the current price was 30% above the lowest low of the last 14 days and 70% below the highest high. The Stochastic Oscillator can be used like any other oscillator by looking for overbought/oversold readings, positive/negative divergences and centerline crossovers.
Stocks above Their 200-day Moving Average
A market breadth indicator that represents the number of stocks in a given group that has closing prices those are currently above their 200-day simple moving average. Common techniques for using this indicator include locating overbought/oversold levels and finding positive or negative divergences between this indicator and the underlying group’s composite index.
Stocks above Their 50-day Moving Average
A market breadth indicator that represents the number of stocks in a given group that has closing prices that is currently above their 50-day simple moving average. Common techniques for using this indicator include locating overbought/oversold levels and finding positive or negative divergences between this indicator and the underlying group’s composite index.
Stop Loss Order
An instruction to the broker to buy or sell stock when it trades beyond a specified price . They serve to either protect your profits or limit your losses.
A price level at which there is sufficient demands for a stock to cause a halt in an downward trend and turn the trend up. Support levels indicate the price at which most investors feel that prices will move higher.
A concept based on the use of a filter. Once privacies have moved by the distance specified by this filter, a new line is drawn next to the previous one . In a nutshell, it is a chart that shows up and down price movement of a minimum size regardless of the time it takes.
A sideways chart pattern between two converging trend lines in which the upper trend line is declining and the lower trend line is rising. This pattern represents an even balance between buyers and sellers, although the prior trend is usually resumed. The breakout through either trend line signals the direction of the price trend.
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