In technical analysis, various stock market theories offer structured ways to understand market behaviour and forecast future price movements. These theories are based on historical price actions, investor psychology, and market trends, helping traders form disciplined strategies. Whether it’s identifying trend reversals or measuring price waves, these theories provide a strong foundation for decision-making in markets like NIFTY, SENSEX, and other key indices.
Key Highlights:
- Dow Theory explains formation and confirmation of market trends across three phases.
- Elliott Wave Theory focuses on recurring wave structures that reflect market psychology.
- Fibonacci Analysis uses mathematical ratios to pinpoint retracement and extension levels.
- Wyckoff Method studies price-volume relationships, highlighting supply/demand
- These theories help in analysing trend direction, predicting reversals, and improving strategies.
- Commonly applied to Indian indices such as NIFTY 50, BANK NIFTY, and SENSEX.