Using charts, technical analysts seek to identify price patterns and market trends in financial markets and attempt to exploit those patterns. Technicians employ many methods, tools and techniques as well, one of which is the use of charts. As such it has been described by many academics as pseudoscience.įundamental analysts examine earnings, dividends, assets, quality, ratio, new products, research and the like. The efficacy of both technical and fundamental analysis is disputed by the efficient-market hypothesis, which states that stock market prices are essentially unpredictable, and research on whether technical analysis offers any benefit has produced mixed results. In finance, technical analysis is an analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.īehavioral economics and quantitative analysis use many of the same tools of technical analysis, which, being an aspect of active management, stands in contradiction to much of modern portfolio theory.
