Technical forecasting

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Technical forecasting

A forecasting method that uses historical prices and trends.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Technical Forecasting

The practice of using statistics to determine future trends in security prices and make or recommend investment decisions based on those expected trends. Technical forecasting does not attempt to determine the intrinsic value of securities, but instead focuses on matters such as trade volume, demand, and volatility. Technical forecasters evaluate short-term trends almost exclusively, which is both a strength and a weakness in their analysis. See also: Fundamental Analysis.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
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With reliable data based technical forecasts, the fast follower can pick the optimal time to engage and balance the risk and opportunities offered by emerging technologies.
Technical Forecasts (see panel far right) says a shockwave will spread out from London this year as the 2002 boom cools off.
The last 12 months have seen prices rise steeply, and though increases are expected to contin-ue, the team at Sussex-based Technical Forecasts say prospec-tive purchasers need not be frightened of more massive hikes.
Technical Forecasts, which has developed the computer programme, say the Black Country district will be among the 200 best-performing postcode areas in the country by 2005.
Technical Forecasts bases its predictions on Land Registry data, intending them to be used by property professionals and calculated on average performances over three years.
Moreover, Goodman and Jacobs (1983) reported that the best performance exhibited by the commercial forecasting services resulted from the use of an informal combination of two technical forecasts. This procedure recommended that a currency be bought or sold only when both forecasting techniques were in agreement.
A report by Technical Forecasts, a company set up by academics at Aston University, has a model of 50 variables affecting house prices, and this forecasts steady if unspectacular price rises in the coming years, but no crash.

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