Now, that you have learned how to do Fundamental Research, let’s take a look at Technical Research for making crucial share investment decisions. What we saw above was a fundamental factor responsible for the movement in the share prices. Besides these Fundamental factors there are Technical Factors viz. the
which also could lead to sharp movements in the share prices. These factors work on Mass Psychology and are closely linked to the Human Mind. Under a given set of circumstances, all minds tend to work in the same direction.
This means that the price of a share tells us as to how the share is going to move in the future and any reasons, let it be Fundamental or Technical, that could lead to a rise or a fall in the share prices is reflected in the price of that share. To give a simple example if a company is going to post excellent results, this will be reflected in the share price with a good rise which will be on account of insider buying. Similarly, the opposite of this also is true.
Technical Research is a subject which can successfully identify the beginning of a sharp rise or fall in the share prices. However, it is incorrect to say that technical research can predict the share movements correctly all the times, as at certain times the markets itself are undecided.