Assets Balance sheet displays the company’s total assets, and how these assets are financed. It is based on below equation: Assets = Liabilities + Equity Assets represent the resources owned by a company. They are used to generate future economic benefits in the form of either higher cash inflows or [...]
Dictionary meaning of Tailwind is a wind blowing from behind i.e. in the direction of forward motion. Similarly the dictionary meaning of Headwind is a wind blowing from directly in front, opposing forward motion. Tailwinds describes some condition or situation that will help move growth higher. For example, falling gas [...]
Standard deviation is a statistical term that measures the amount of variability or dispersion around an average. Generally speaking, dispersion is the difference between the actual value and the average value. The larger this dispersion or variability is, the higher the standard deviation. The smaller this dispersion or variability is, [...]
Fibonacci Retracements are ratios used to identify potential reversal levels. These ratios are found in the Fibonacci sequence. The most popular Fibonacci Retracements are 61.8%, 38.2% and 23.6%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%. Fibonacci sequence extends to infinity and contains many [...]
Moving Average Convergence Divergence (MACD) Developed by Gerald Appel, the Moving Average Convergence/Divergence oscillator (MACD) turns two trend-following indicators, moving averages, into a momentum oscillator by subtracting the longer moving average from the shorter moving average. As a result, the MACD offers the best of both worlds: trend following and momentum. The MACD [...]
Exponential Moving Average (EMA) EMA is a type of moving average that places a greater weight and significance on the most recent data points. It is also referred to as the exponentially weighted moving average. Exponentially weighted moving averages react more significantly to recent price changes than a simple moving average, which applies [...]
Divergence Divergence is a critical concept in technical analysis of stocks. The goal of the technical analyst when using divergence indicators is to spot trend reversals. Early identification of a trend reversal can be highly profitable. Divergence is where the price of a stock and a set of relevant indicators, [...]
Relative Strength Index Developed by J. Welles Wilder, Relative Strength Index (RSI) is a momentum oscillator that measures the speed and change of price movements. RSI oscillates between zero and 100. Traditionally asset is considered overbought when RSI is above 70 and oversold when below 30. Overbought refers to a [...]
Pivot points Pivot points are support and resistance levels that technical analysts use to pinpoint potential reversals in price over time. While the levels were originally used by floor traders to set key levels to watch during the day, technical analysts have expanded upon the concepts to develop at least [...]
Volume is the number of shares of stock, bonds, options, or futures con tracts traded over a designated period (e.g., daily, weekly, monthly). Volume reflects the intensity (strength) of a stock, commodity or index. Volume also provides an indication of the quality of a price trend and the liquidity of a [...]