Best stock price analysis techniques

Best stock price analysis techniques

Stock futures December 27, 2019

Best stock price analysis techniques


Best stock price analysis techniques


Earning profits from the stock market is difficult if we don't know the market - sector - stock analysis. Whether the market is in bullish or bearish mode our main objective is to find out the best stocks which will give us a high return than the market. But how to find those stocks? To find out the best stock you need to identify the strongest sector first. To identify the strongest sector analysis the best performing sector when the market is falling. The sector with strong and good stock will fall less as compared to week sectors. Therefore the sector which drops less will move first when correction over and the bullish rally starts.
  1. This method is used by many investors in the stock market and the accuracy is very good.
  2. Let's say a stock ABC retrace 50% of the gain and another stock XYZ retrace 38% stock with 38% retrace the least and it will be the strongest stock than stock ABC
  3. Remember two terms for further analysis 1. Swing 2. Leg
  1. Let say Stock ABC - Check the picture - you can see the volume in up rally leg and volume in decline leg. The number shown below each bar is the volume of a particular day.
  2. The volume on the rally leg and decline leg shows the direction in which the stock or index is going.
  3. E.g. On rally days stock ABC traded with the volume of 2000 per day and total volume in the rally leg is 8000. In decline leg stock ABC traded with 2000-3000-3000 and the total volume is 8000.
  4. In simple it looks like volume in rally leg and decline leg is equal but after calculating the average traded volume in stock it looks like a decline leg has 33% more volume as compared to the rally leg.
  5. Volume in rally leg need to be greater than decline leg if stock needs to maintain the uptrend 
  6. Volume in decline leg need to be greater than rally leg if stock needs to maintain the downtrend

Sell signals for stock 

  1. When Stock ABC hits new high and total volume on the new rally leg reduced by 50% or more as compared to the previous rally leg and stock close below the previous rally leg high this condition will trigger the sell signals in stocks
  2. Top of the stock is confirmed if stock volume increased by 50% of more on the decline leg as compared to the rally leg.

Buy Signals for stock


  1. The bottom in stock ABC is confirmed when the stock made new low and total volume reduced by 50% or more against the previous down leg and closes above the previous low. This condition triggers the buy signals in stocks
  2. Confirmation of the stock bottom is confirmed when volume increased by 50% or more on the up leg as compared to the volume of the decline leg.
  3. Buy Signal strength is more if the volume is reduced by 70% or more in down leg 
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