A Study on Technical Analysis and Its Usefulness in Indian Stock Market

An investor in the stock market would be interested in analysing the stock price movements. Prices in the stock market fluctuate due to continuous buying and selling in the market. There are basically two approaches used in analysing the share price movements. They are fundamental approach and technical approach. Both these approaches have the same objective of buying at lower price and selling at a higher price to gain good return on investment. It can be said that the end goal of these two methods are one and the same. However, there exists vast difference between the fundamental concepts of these two methods.In fundamental analysis the analyst would be concerned with the fundamental factors. He would be interested in determining the true worth or intrinsic value of a share based on its current and future earning capacity. They would buy the share when its market price is below its intrinsic value. The term "Technical Analysis'' is a general heading for myriad of trading techniques. Technical analysis attempts to forecast future prices by the study of past prices and a few other related summary statistics about security trading. A technical analyst is always concerned with the direction of price movements.The aim of this study is to evaluate technical analysis from Indian perspective and to find out its usefulness in Indian stock market