Using charts is an efficient way for any investor to identify stocks worthy of their money. Technology stocks are some of the most valuable, yet volatile markets around these days. Because the price of raw materials is in constant flux and new technology is coming out almost every hour, these stocks can have steep climbs and deep declines in the same day. Using a chart for technology stocks is the best way to analyze and interpret these volatile stocks.
Compare and Contrast
Charts are great for many things, but the ability to overlap different stocks and see the comparison and contrast between them over a given period of time makes using charts a no-brainer for technology stocks. Being able to compare two or more stocks will allow you to get an idea about how the company is doing compared to their competition. You will be able to see when companies came out with new products and when they received press coverage for product releases and other newsworthy items. From there you can identify the impact these had on the actual stock value.
Identify Developing Trends
Using charts for technology stocks will also help you develop ideas of certain trends within markets. For instance, if semi-conductors are in a downward trend, and software is swinging upward, you will know which market will be best to invest your money. Looking at raw commodity stocks alongside the technology stocks will also give you understanding about how the raw materials affect the finished goods. Going back to the semiconductor example, if you note that every time there is a rise in the price of silicone, the semiconductor stocks take a hit, you will be able to watch for the early warning signs in order to get a feel for what is to come.
Get the Big Picture
Technology stocks do a great deal of moving around the charts and by keeping track of what the charts show, you can begin to develop an overall picture of how the stocks are doing and what factors affect them. You will be able to get the ‘big picture’ with the extensive data you can collect.
There are many reasons why a stock would fluctuate suddenly; some of which are not evident when looking at just a company’s new product development or price of raw materials. By looking at what was happening in the world during the peaks and valleys you can learn how to predict the market to some degree. There may have been a large oil spill, which resulted in the price of silicone to increase, making the market for that commodity-based technology start on a sharp decline.
Charts can tell you a lot about whatever market you use them for, but a chart’s real glory shines through in the technology industry. The vast amount of information you will obtain from technology charts will let you compare and contrast different stocks quickly, allow you to see and develop trends that are useful for your decision making process, and give you a general overall picture of the health of the company and market. All of these aspects of technology charts make it easier than ever to get into technology stock investments.
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By David Moore