Stock Trading Technical Information
Technical analysis for stock trading is defined as the prediction of future prices based on an examination of historical prices. It can be used to make a buy or sell decision on a stock.
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Support
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One key element of technical analysis is the concept of support for a stock. A support level is the price at which demand is high enough to prevent further price declines. When a stock is at a support level, that usually is considered a buy signal.
Resistance
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Conversely, a resistance level is reached when a stock is at a price where enough selling occurs that further price gains are not possible. Traders use this as a sell signal.
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Trend Line
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Another important element of technical analysis for stock trading is the trend line. This is the line that connects a series of stock prices and is projected into the future to identify support and resistance levels. The trend line can either be in an uptrend, where the stock price is moving higher, or a downtrend, where the price is moving lower.
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