Question

(TCO E) In technical analysis there are multiple indicators of market movement. The three most widely known are Breadth of the market, Relative Strength, and the Trin Statistic. Provide a brief explanation of the insight potentially revealed by each measure.

Answer 1

Breadth of the market is a security analysis tool where number of rising stocks is divided by the number of declining stocks. If market breadth is said to be more than 1 in result, the market is called to be bullish , if it results less than 1, the market is called to be bearish. This is technically used to reveal the stock overall performance by index of selective group of stocks.

Relative Strength is a technical analysis tool which is entirely based on the comparison in between the historical and current stock performances in order to evaluate the growth performance of company.

Trin Statistic is also another technical analysis tool which is a short term trading index statistic. This considers the comparison in between number of rising stocks and declining stocks ratio with the rising and declining stocks volume. This is calculated for the purpose of evaluating the market sentiment, number of buyers and sellers to see the demand and supply for the market.