A word used in the context of charting, technical analysis is the opposite of fundamental analysis – the study of firms from the bottom up. Instead fans of technical analysis believe that the price trend is all that counts so as an investor you should look for a strong price trend and invest accordingly as quickly as possible regardless of the fundamentals (such as a p/e ratio).

The trick is then to spot when an existing trend might be about to end. In both cases price charts are used heavily as a way of spotting the best entry and exit points for a particular stock or index.

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