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Don’t start investing or trading in stock market without proper knowledge. In Indian stock market or in any stock market few standard terms are used with the relevance of technical analysis. Sharetipsinfo suggest investors or traders must read complete glossary to understand stock market better. Learn basics of stock market with our glossary.
On Balance Volume (OBV)
One of the first and most popular indicators to measure positive and negative volume flow , the OBV was introduced by Joe Granville in 1963. The concept being the indicator is that volume precedes price . OBV is a simple indicator that adds a period’s volume when the close is up and subtracts the period’s volume when the close is down . A cumulative total of the volume additions and subtractions form the OBV line . This line can then be compared with the price chart of the underlying security to look for divergences or confirmation.
The number of options or futures contrasts that are still unliiquidated at the end of a trading day .A rise or fall in open in interest shows that money is flowing into or out of a futures contract or option , respectively . In futures markets , rising open interest is considered good for the current trend . Open interest also measures liquidity .
An indicator that determines when a market is in an overbought or oversold condition. When the oscillator reaches an upper extreme, the market is overbought. When the oscillator line reaches a lower extreme, the market is oversold.
Over The Counter (OTC)
A securities market that is not geographically centralized like the trading floor of the NYSE. OTC securities are traded through a telephone and computer network.
A technical condition that occurs when prices are considered too low and rips for a rally. Oversold conditions can be classified by analyzing the chart pattern or with indicators such as the Stochastic Oscillator and Relative Strength Index (RSI). A sharp decline from 30 to 15 in 2 weeks might lead a technician to believe that a security is oversold. Or, a security is sometimes considered oversold when the Stochastic Oscillator is les than 20 and when the relative Strength Index (RSI) is less than 30.it is important to keep in mind that oversold is not necessarily the same as being bullish . It merely infers that the security has fallen too fast and may be due for a reaction .
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