Technical Analysis: Understanding the Beliefs of Technical Analysts

Technical Analysis

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Technical analysts believe that -

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A. B. C. D.

C

Technical analysis, in contrast to the efficient market hypothesis and fundamental analysis, holds that past price and volume data can be used to discover market trends that can predict future market behavior. In order for the market to have these trends, prices must adjust slowly to new information, rather than quickly or instantaneously. Adjustment is slow because of different sources of information or because certain investors receive information before others.