Economics Stock Market Assignment
1. Technical Analysis
a) Technical Analysis is the analysis of past price changes and hoping of predicting changes of price in the future. Technical Analysis will help someone determine whether they would like to invest in a company or not, by looking on the number of people holding that stock, the supply and demand to determine the future trends of that stock. There are many ways to show these, some of them being charts and graphs.
b) Line Chart : A line chart works by graphing different points and connecting them in a line, this is useful for predicting future changes and showing trends. Line charts can show statistics over hours, days, months, and also years. Line charts aren't as specific as other types of graphs, but they still show the closing and opening prices. In the graph below, the line chart shows statistics on a hourly basis. The horizontal (x-axis) line represents the time, in this case every hour, while the vertical (y-axis) line shows the price. The highest and lowest points of this stock is highlighted in orange. As you can see there is a major increase from the lowest point to the highest point over 2 hours, and for someone who does stocks would be a great time to invest in at 3.23.
Candlestick Chart : A candlestick chart displays more information than a line chart. It shows the highest point, lowest point, opening and closing point, as well as lines of curvature to show trends over a period of time. A candle stick usually has 2 lines sticking out on the side of each bar, if the stock is increasing then the lowest bar would represent the opening point, and the top line being the closing point. If the stock is decreasing then the top line shows the opening point and the lowest line shows the closing point. Candlestick charts are shown by 2 colors, either black and white or other colors, in the graph below, if the stock is going down, then it is shown in red, if it is going up it is shown in green.