Charting is an integral part of the Stock Market. Even though people say that stock market cannot be predicted or determined, there are ways and techniques that have proved that wrong in the past decade or more. One of the famous technique to predict the stock prices is candlestick pattern. This technique is being used for more than a century and the candlestick stick pattern counts the human emotions and sentiments into account.
A simple candlestick pattern stock graph look like below:-
The size of the candlestick represents and indicates different things that are going on in the market. I am not trying to explain in detail about how these candlesticks work,
but trying to imply that by using suck techniques we can indeed
determine the course of the stock prices. For people who are interested in learning these pattern, more information on candlesticks can be find here: Detailed analysis of candlesticks.
Let me give a recent example to prove my point that no matter what people think about the future of the stock price or how badly analysts try to prove there point. But it is the chart that makes it move up and down even if the news is big or small.
Recently all the analysts were skeptical about the OIL price going high in the near future. Some of them were even targeting the price to go below $30/barrel. But if one would have looked at the stock charts related to the OIL they could have easily determined that the chart was trying to indicate completely opposite.
Articles indicating that the OIL price will keep going DOWN.
In the midst of all these news the chart was telling completely opposite. Take a look at the below 2 charts till March 17th for USO and UWTI that tracks the OIL.
USO:-
UWTI:-
As described above the chart clearly showed that these stock prices related to the OIL are going to UP and the trend is about to change. Even though the news was completely opposite and analysts where expecting it to keep going low.
The next two images of the same stock demystifies and proves that the chart is always right !!!
USO:-
UWTI:-
This proves that the stock market is not a mystery and stock prices can be predicted up to certain percentages. These charting techniques have been in use for decades and many or almost most of the analysts use them in there day to day trading. Common people are usually unaware about these kind of techniques and have a wrong thought placed in there mind that making money in stock market is completely on LUCK !!!
