DEFINITION of 'Technically Strong Market'

A market in which both open interest and prices are increasing or in which both open interest and prices are decreasing. A market in which trading volume corresponds to price change where increasing volume accompanies increasing prices, and decreasing volume accompanies decreasing prices is considered technically strong.

BREAKING DOWN 'Technically Strong Market'

Technical analysts try to profit from trends in the prices of securities. They believe that historical pricing trends tend to repeat themselves, and by using price charts to identify these trends they can determine the best times to buy or sell to make a profit. Technical analysts are not concerned with fundamentals like the quality of a company's product or service, or its management.




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RELATED FAQS
  1. Why is the Uptick Volume important for traders and analysts?

    Find out why technical analysts and traders keep track of uptick volume to better assess the momentum of a stock's price ... Read Answer >>
  2. Why is trading volume important to investors?

    Learn about trading volume, its importance and how investors analyze volume to confirm a trend or reversal in a security. Read Answer >>
  3. What does a falling open interest on a stock signal?

    Learn what falling open interest on a stock signals. Open interest is like volume for options. It is considered a leading ... Read Answer >>
  4. What is the Uptick Volume formula and how is it calculated?

    Learn more about uptick volume, a measurement of the number of trades that take place during a time when an asset's price ... Read Answer >>
  5. What types of data are necessary to make a technical analysis?

    Understand what technical analysis is, the basic theory behind employing it and what data inputs are needed to conduct it. Read Answer >>
  6. How can I calculate a company's forward p/e in Excel?

    Discover why trading volume is higher when the price of a security changes. Supply and demand is the mechanism through which ... Read Answer >>
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