Technical Sign

Technical sign

A short-term trend in the price movement of a security that analysts recognize as significant.

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Technical Sign

Any measurement indicating a present or future change in the price of a security. Technical analysts use patterns of a security's past performance to determine where its price will go in the future. These patterns may take many forms. For example, when technical analysts find that a security's price rarely goes below a certain level (called a support), and the price begins to fall toward that support, they may take this as a technical sign that the price will soon begin to increase, based on what has happened in the past. To a certain extent (though certainly not always), technical signs can be self-fulfilling prophesy. That is, when technical analysts recommend buying that security based on the technical sign of its price dropping toward the support, they may increase demand for that security among the investors to whom they are making recommendations. This may cause an increase in price by itself.