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. How do I start using technical analysis?

    Technical analysis is a method of analyzing securities by evaluating current and historical price and/or volume activity. ... Read Answer >>
  2. What is the difference between open interest and volume?

    Learn how to interpret the relationships between price, volume and open interest in the options and futures markets. Read Answer >>
  3. What is the difference between fundamental and technical analysis?

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  4. What is the difference between fundamental and technical analysis?

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  5. Are Stocks With Large Daily Volume Less Volatile?

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