Share market experts rely on two analysis before selecting a share for investment. One is technical analysis, in which a share’s movement of price and volume is studied over years and they try to strategize the movement. Another is the fundamental analysis in which they study about the company associated with that share, its sector growth etc.

However a genuine investor cares more about fundamental analysis of a company because the price of a share can be manipulated to go up or down. if this there on one side ,as I already said nowadays information about company and sector performance reaches all at the same time through media ,fundamental analysis also became a more common feature known to all experts.

So sometimes, a common man who is a regular observer of market is able to set good portfolio for himself when compared with experts. In this article I will just take you through certain basics of technical analysis.

Candlestick representation of a stock price movement within a day:

A share when traded will be subjected to four price levels:

1. Opening Price: The price at which the first trade is done or the market opens
2. Closing Price: The price at which last trade is done or When the market closes.
3. Intra-Day High: The maximum price the share was traded for the day.
4. Intra-Day Low: The minimum price the share was traded for the day.

This is simple ideal graph by which I am trying to explain you all the simplest way of predicting and investing. The share price is plotted for various days in a graph as shown above. Using statistical tools the trend line is derived. It will be observed that prices follow a particular pattern. Assume that you are close to level 4 of the graph. Since you know the price is going to rise after that you can buy the stock. The bottom vertical projections from x –axis indicate the volume of trade, usually at these points volume will be more because of buying. Similarly it is the reverse when you are point 3.this is the simplest way of understanding and in further articles I will take you to depth.

The Wall Street Journal is reporting some shocking economic news:

“India’s stock market recorded its biggest single-day fall ever Monday, prompting regulators to suspend trading as investors panicked about the economic policies of the incoming communist-supported government of Sonia Gandhi. The benchmark index of the Bombay Stock Exchange, the Sensex, opened sharply lower and tumbled further in a 10.9% drop, before trading was suspended for an hour. The National Stock Exchange, the country’s largest, plunged 11.5%.”

If that’s happening in India, you can bet that the American market will drop as a result too, but that’s not what worries me…

What concerns me is whether the problems on the Bombay Stock Exchange are the tip of a new Cold War iceberg, where we all have such fear of communism that we justify any military or economic measures. For those of you that never learned, the United States was in Vietnam for just this reason: a fear of communist dominance in the Far East. That we were handed the problem in Vietnam by the French when they decided to bail, well, that’s another topic entirely.The Times of India reports: “MUMBAI: The Sensex fell more than 750 points on Monday morning on sustained fears over the future of economic reforms under a Left-backed Congress government, dealers said.” and the Hindustan Times reports: “Brokers said the volatility in the market would continue until the new Government’s policies, especially those on privatisation of state-run companies, are made clear. The market dived on fears that the Congress party, set to form a new Government after ousting the ruling National Democratic Alliance in general elections last week, may slow down privatisation of state-run companies and undo market-friendly policies to appease the leftists, whose support is crucial for a parliamentary majority.”