“A picture speaks a thousand words”, a well-known adage that speaks the virtue of picture and the wealth of information that it contains and conveys.
In the interesting world of equity market where the law of supply and demand dictates the direction of an equity instrument (e.g. stock) and the market where the buyer (Bulls ) and seller ( Bears) often wrestle with each other on the price of the equity. And then there are cases when both parties decide to stay on the sideline due to lack of interest or fresh leads.
In any case, when we plot the chart based on the opening and closing price and the volume transacted, it became clear that we can visualize and observe the action going on, of course as to what is really going on, that is still open for interpretation.
This has lead to the adoption of Technical Analysis (TA) which includes charting, various forms of simple and highly sophisticated technical indicators, Japanese candlesticks among investors and traders, fund managers around the world in their short-term, mid-term or long-term investment decision-making. They use TA to better understand market behavior (or rather the collective human behavior) to uncover opportunity or shun potential losses.
Another reason why TA has been gaining popularity, is because we human are emotional creatures and can be easily affected emotionally. Emotions such as fear or greed often make us susceptible to rational exuberance or even excessive gloom. By employing TA and having them implemented in computer programs, we can automate and eliminate the emotion out of the decision making.
Quoting from the famous John Murphy (Philosophy of Technical Analysis),TA is based on the following three premises:
Market actions discount everything.
Prices move in trends.
History repeats itself.
ONGC is consolidating at 1120 1140 levels in its oversold zone where as market tank by almost 4 % in previous 3 sessions .It is indicating that 1100 is a nice support for it and every investor is ready to keep it in portfolio ....more over it was traded at 1275 in Oct 09 ...
Intra day targets...
1136 1142 1152 1164 1176 1189
Keep stop loss of 1112 and trail it accordingly ...