Technical Analysis is a method that determines moments to buy or sell an investment based on functions of security price and volume. Investors using Technical Analysis search for statistical trends based on historical performance such as whether a stock is above or below its 6-month moving average. Technical Analysis captures the psychological aspects of the market in the review of past patterns, whereas Fundamental Analysis fails to factor in investor psychology, believing that fundamentals will rule in the long term and short-term psychological blips will correct themselves. Technical analysts might also use charting techniques to determine support, resistance, and trend reversal in charts like a candlestick chart. Investors commonly combine both fundamental and Technical Analysis.
