There are two prominent methods usually applied in financial markets, in order to evaluate equities of listed companies: fundamental and technical analysis. Fundamental analysis supports the evaluation of equities (internal enterprise value, overvalued or undervalued companies acting as buying / selling signals) on information related to the track of the equity, the industry in which the company operates, as well as focal macroeconomic figures. On the other hand, technical analysis establishes its appraisal on the assumption that intra-company developments, intra-industry incidents as well as events in the economic environment have been already priced in, meaning that aforementioned figures add little to the analysis of an equity and that it is more important to closely observe the track of an equity. Technical analysts believe that the prices of equities during the period that they are initially listed on the stock market result to certain formations that are repeated over and over, so that one can actually proceed with providing estimations as to the price of an equity in the future by using the course of technical indices in the past. The focal terms employed under technical analysis in order to capture the trend of a stock and provide subsequent suggestions (buy, sell, hold) are the following:

*Daily fluctuation: the daily course of a stock, taking under consideration the daily lows and highs, as well as the closing price of the equity.
* Ascending move : A formation according to which each daily low is higher than the one of the previous trading session for a significant number of consecutive sessions.
* Descending move: A formation according to which each daily low is lower than the one of the previous trading session for a significant number of consecutive sessions.
* Support : A certain level where equity demand is larger than supply, therefore creating a barrier that effectively stops the equity’s downward move. In order to define a support, aforementioned level must be verified on a long-term (above 6 months) to mid-term (3-6 months) basis. While a support usually represents buying levels for an equity, unfortunate attempts to break it during a downward move that are not accompanied by significant trading volumes provide investors with exit signals.
* Resistance : A certain level where equity demand is larger than supply, therefore creating a barrier that effectively stops the equity’s upward move. In order to define a resistance, aforementioned level must be verified on a long-term (above 6 months) to mid-term (3-6 months) basis. While a resistance usually represents selling levels for an equity, unfortunate attempts to break it during an upward move that are not accompanied by significant trading volumes provide investors with hold or even buying signals.
* Moving average : The medium price of the previous 30, 60 or 90 days closing prices respectively. Upward or downward signals are provided by the stock when it moves above or below the moving average (depending on the time horizon employed).
* MACD :A technical oscillator calculated by the subtraction of two moving averages whose time horizons differ. MACD provides investors with buying signals when its course effectively breaks the track of the shorter moving average going up. Furthermore, the oscillator’s outlook provides information as to overbought/oversold regions.
* RSI : A technical index of oscillation representing the moving average of the equity’s ascending and descending moves. RSI’s utility is best demonstrated when defining overpriced (>70) and/or underpriced (<30) regions, as well as to spot different trends of the RSI and stock under question when combined with the equity’s actual track. In essence, RSI provides investors with buying or selling signals when it approaches the 30 units moving down or up accordingly.
* Commodity Channel Index : A technical oscillator calculated by the comparison of two moving averages whose time horizons differ, resulting to overpriced (>+100) or underpriced (<-100) regions accordingly; aforementioned oscillator provides buying signals when standing around the levels of 0.
* Stochastics : A technical momentum indicator that compares a security's closing price to its price range over a given time period, resulting to overpriced (>80) or underpriced (<20) regions accordingly.
* Money flow : The daily trading volume on a security; compared with the same number of previous sessions, money flow demonstrates inflows or outflows on a security, resulting to overpriced (>80) or underpriced (<20) regions accordingly.
* Intraday Momentum Index : A similar to the RSI technical oscillator that, however, does take under consideration a security’s intraday fluctuation. Again, prices >70 (<30) show that the equity has entered overpriced (underpriced) regions.
* Chande oscillator : A technical momentum indicator created by calculating the difference between the sum of all recent gains and the sum of all recent losses and then dividing the result by the sum of all price movement over the period. It provides investors with buying-selling signals when approaching the levels of 0.
* Demand Index : A technical indicator combining the effects of price and volume, providing investors with buying-selling signals when approaching the levels of 0.
* Ease Movement : A technical momentum indicator used to illustrate the relationship between the rate of a security’s price change and its volume that attempts to identify the amount of volume required to move prices. It provides investors with buying-selling signals when approaching the levels of 0.


Technical analysis evolves around two axes. The first axe consists of a security’s chart, which demonstrates its move during a given period. The analysis of the chart shows the equity’s levels of resistance and support, with the latter being also determined by the investment’s time horizon (short-term, mid/long-term). The second axe around which evolves the technical analysis of an investment consists of the analysis of the technical indicators, with the latter providing investors with buying/selling signals on a daily basis. The reliability of the technical indicators/oscillators depends solely on the security’s chart; in essence, as to whether buying/selling signals, as well as resistance/support levels are confirmed. Whenever buying signals, provided by a technical oscillator for a security, on a given price level are combined with the existence of a support level, a downward move will only be temporary.