How to do Trend Analysis?

1. How to do Trend Analysis? What do you mean by Trend Analysis? Trend analysis basically refers to a technical mechanism that is used to forecast future stock price movements based on the recently analyzed trend data. Trend analysis is based on the notion that what has happened in the past gives traders an iota of what the future will be. There are three major types of trends: short-, medium- and long-term. This trend analysis is of immense help as it is very difficult to find out what is going to happen in the future. The simple concept of this technique is to research the past data and see how it performed so that future predictions can be made about a particular stock or the overall stock market. Even if you are working with the best stock broker in India, this analysis could be of immense help for a stock investor. A trend refers to the general path the market is approaching during a particular period of time. Trends can go both upward and downward, linking to bullish and bearish markets, correspondingly. While there is no stated minimum amount of time needed for a direction to be read as a trend, the longer the direction is upheld, the more noteworthy the trend. Almost all investors and the top 10 stock brokers in India follow this process to make future decisions.

2. Here is how to do the trend analysis. So, now you have a basic idea about what trend analysis is. Now, let's understand how to do trend analysis. Decide which market segment to analyze Before you begin performing trend analysis, it is better to first decide which market segment you should analyze. A market segment doesn't need to be industry-specific, such as Information Technology or Healthcare. You can also use trend analysis to look at several types of investments as a whole, like the equity market or REITs (real estate investment trusts). Once you decide on the segment, it's time to look at its general performance. That includes anything that can influence it - fresh government regulations, scarcities of a specific raw material, and so on. Check the General Performance of the Chosen Market The most usual time frames to analyze the performance of a market over are month-wise or year-wise Monthly trends reveal how a market or individual stock performs from one month to the next. What that doesn't account for seasonality. And that can be key depending on the market. A yearly analysis can give a more precise comparison. Rather than checking how the market performed in October compared to March, you instead compare October of 2020 to October of 2019. In general, yearly trends are found to make a better prediction of future market activity. It tends to give most of the benefits of comparing month-wise. However, it eliminates unevenness such as seasonality. Steps to Identify Trends There are three popular trend-analysis tools that are widely used by market experts. News Catalysts A news catalyst means any type of event or exposure that tends to cause a histrionic change in the price of a stock or markets as a whole. A news catalyst can be essentially anything that a trader can consider as good or bad news. It may include things like: •Fresh government legislation •Earnings reports exceeding or falling short of opportunities •An analyst revision

3. •New product announcement •A legal tussle •War or civil unrest •Mergers or acquisitions A news catalyst doesn't always have an instant effect on a market or a stock's rudiments. It can either stimulate or jangle investors - making a market up or down. Stock Screeners This tool enables traders to filter stocks - by sector, market, performance, assessment, dividends, average volume, margins, income reporting, and balance sheet. Traders can also filter small-, mid-, or large-cap stocks. Overall, a person can define his own metrics, and a stock screener will show stocks that match their specific norms. Stock screeners can either be free or subscription-based, depending on where you searched for them. Stock Indicators Indicators refer to statistics that examine prevailing market conditions and also predict probable economic or financial trends. Technical Indicators These indicators are used in technical analysis to determine how the price of a stock will move on. It involves the use of mathematical calculations based primarily on historical trading data such as price and volume. One example of a technical indicator is the relative strength index (RSI), which regulates an asset's price momentum by comparing the size of fresh gains with losses. Economic Indicators These indicators can analyze sectors of the economy or the entire economy and can indicate growth or shrinkage. One example of the economic indicator could include data shown by the Department of Human Resource or the Institute of Supply Management (ISM).