Technical analysis is in simple words a study of price movement using charts as a tool. This study has now become popular as it is very easy for an individual to understand and implement it. Today due to the growth of media and technology the circulation of news has reduced its speed drastically. This has lead to the price of stocks reacting much faster, if compared to the period a few years ago. And price movements can be tracked only using this tool of Technical Analysis.

Technical analysis works on three main assumptions –