Interpretation of Stock Quotes

Quoting of stocks during a trading period is nothing list of prices of the stock in which a deal can be made between the seller and the buyer. Stock quotes happen in real time or else there will be a delay of 15 minute. Stock quotes are usually quoted in decimal points earlier fractions were used for it. The stock quotes refer to the price. The stock quotes are usually fluctuating. The quotes vary with respect to the demand and supply in the market. If the supply is more than compared to the demand then the value of the stock goes down. If the supply is less than compared to the demand then the stock value goes up.

The technical analyst draw pattern of these stock prices and form various charts. These chart patterns plays a vital role in the estimation of the future price of the stocks.

 They use these chart patterns to predict the future of the stocks. These charts have a time frame categorized in seconds, minutes, day, week, month and year. These charts can be used to identify the highest bided price, lowest bided price etc. These charts give the details of the opening price and the closed price for a particular day. These charts provide the information about the volume traded. This information’s are essential to make trading decisions.  The efficient trader knows when to buy a stock or sell it based on these chart formation. Technical analyst use these stock quotes to draw different kind of charts based on their needs.  It should be noted that analysis can be made using these stock quotes only for a short term investment. Long term investment is basically dependent on fundamental status of the company. Technical factors cannot hold when a market is reacting to some strong news flow.

The basic assumption that the technical analyst make during the price estimation is that the behavior of the investors repeats similar to that of its predecessors in an ideal condition.  Thus the interpretation of stock quotes plays a vital role in the price estimation of stocks for a shorter time period.

Questions

• What are the important factors that determine the price movement according to technical analyst?
• What is the basic assumption made by technical analyst while analyzing the various chart patterns?