The definition of a technically strong market’
Technically strong market signals reflects a healthy or positive points of data from the cash flow analysis or technical analysis. Common indicators include the advance/line drop (a/D), arms Index (TRIN) and moving averages.
Breaking down the ‘technically strong market’
As an example, the market in which the increase in average trading volume to accompany the rise in average prices, indicating a positive cash flow is a technically strong market. Bullish activity on the market can be expected to continue. In the same vein, when a decline in average trading volumes occurs with the decrease of the average price, there is an indication that the existing stock markets is on the wane. The softness of prices firming in this technically strong market scenario.
The advance/line of the fall is a popular tool to assess the overall internals of the market. If line a/D is positively sloping and the market moves up, the market is considered technically strong. The appropriate measure of market breadth, which shows the degree of participation of shares in the market rises, is the index of the weapon. By the way, that this figure is calculated, a value less than 1.0 indicates a healthy activity. More intuitive for the average investor moving average, or 50-, 100 – and 200-day varieties. The average investor can see where the current market line in relation to the moving average. Just a market where trading above these lines is to be in good shape.
Technical analysts try to profit from price movements of securities. They believe that historical pricing trends tend to repeat, and with the help of price charts to identify these trends, they can determine the best time for buying or selling for profit. When they see a technically strong market for securities, basket of securities or a broader index, they can Express their bullishness in long positions.