Types of prices-Market Vocabulary

In this blog we have made our effort to explain few terms that are routinely used in the market. They are the technical terms used in the market to mention the price movements of the traded financial asset. We are going to brief about the various types of prices used in the market and its implications.

OPENING PRICE

The opening price is the price at which a security trades first at once the exchange opens on a specific trading day. The opening price is an important indicator for the particular day's trading activity, especially for short-term day traders. The securities with very large intra-day price variations will have those fluctuations measured in relation to the opening price for the day.

CLOSING PRICE

Most financial instruments are traded after hours, so the closing price of a security may not equal its after-hours price. Still, closing prices provide a useful indicator for investors to evaluate changes in stock prices over time - the closing price of one day can be compared to the previous closing price in order to measure market sentiment for a given security over a trading day.

A security's closing price on the previous day of trading. Previous close can refer to the previous day's value of a stock, commodity, bond, futures or option contract, market index, or any other security. By comparing a security's closing price from one day to the next, investors can see how the security's price has changed over time.

The closing price is the final price at which a security trades during the closing time of the exchange on a given trading day. The closing price represents the most up-to-date valuation of a security until trading starts again on the next trading day.

ADJUSTED CLOSING PRICE

A stock's closing price on any given trading day that has been adjusted to include the distributions and corporate actions that happened preceding the next day's open. The adjusted closing price is frequently used when examining historical returns or performing a detailed analysis on historical returns.

PREVIOUS CLOSING PRICE:

A security's closing price on the previous day of trading. Previous close can refer to the previous day's value of a stock, commodity, bond, futures or option contract, market index, or any other security. By comparing a security's closing price from one day to the next, investors can see how the security's price has changed over time.

                                                                                                                                           by,

                                                                                                                 Global Market Astro

Three Major Economic Indicator

In this blog, we have made an attempt to brief about the primary and essential indicators to watch for during the market. An economic indicator in simple is a tool used to predict the future economic trends. The economic indicators are calculated at regular intervals of time to represent the economic performance of a country or a particular sector. These economic indicators surely will have a higher impact on the market movements and they become an inevitable tool for a trader to watch out during the live market.

The economic indicators are categorized into three types

1. Leading indicators
2. Lagging indicators
3. Coincident indicators

(1)Leading Economic Indicators:

The leading economic indicator generally signals the future events. The leading indicators have the prospective to forecast the direction in which the future economy is headed. They are subject to frequent changes ahead of the upcoming economic adjustments.

Some examples of leading indicators are stock market, manufacturing activities, inventory levels, retail sales, building permits, level of new business start-ups, etc.,.

(2)Lagging Economic Indicators:

The lagging economic indicators are contrary to the leading indicators. They signal the economic events that have occurred in the past. They don’t give us a perspective to know where the economy is headed instead they indicate the economic changes over a period of time and are helpful in identifying the long term trends.

Some examples of lagging indicators are Gross Domestic Products (GDP), income and wages, unemployment rate, Inflation rate as Consumer Price Index (CPI) and Wholesale Price Index (WPI), currency rates, interest rates, balance of trade, etc.,.

(3)Coincident Economic Indicators:

The coincident economic indicators are on par with the economic events. They occur at the same time of economic changes and are significant in reflecting the current economic scenario.

Source : https://www.globalmarketastro.com/blog/three-major-economic-indicator/

Relative Strength Index (RSI) -Technical Indicator

In this blog Global Market Astro has tried to explain its readers a few important technical indicators used by the traders to forecast the market movements.

Relative Strength Index (RSI)

Relative Strength Index is a primary technical momentum indicator which compares the magnitude of recent gains to recent losses in an effort to conclude overbought and oversold situations of an asset.

RSI Formula:
                      RSI = 100 – 100/ (1 + RS*)

                      Where RS = Average of x days’ up closes / Average of x days’ down closes.

In this chart, the RSI ranges from 0 to 100. A financial asset is considered to be overbought once the RSI reaches the 70 level, meaning that it may be getting overvalued and is a good sign for a pullback. Likewise, if the RSI reaches the 30 mark, it is a signal that the asset may be getting oversold and hence likely to become undervalued.

Overbought

A financial asset that has gone through sharp upward movements over a very short period of time is considered to be overbought. Technicians use indicators such as the relative strength index, stochastic oscillator or money flow index to identify securities that are becoming overbought. It is a situation in which the demand for a particular asset excessively pushes the price of an underlying asset to levels that do not support the fundamentals. Overbought stocks may always experience a pullback.

Oversold

Assets that have experienced sharp downward movements over a short period of time are often deemed to be oversold. It is a condition in which the price of an underlying asset has dropped down sharply, and to a level below which its true value. This condition is usually a consequence of market overreaction or panic selling.A condition in technical analysis where the price of an asset has dropped to such a degree – usually on high volume – that an oscillator has reached a lower bound. This is usually understood as a sign that the price of the asset is becoming undervalued and may represent a buying opportunity for investors.Oversold is the contrary of overbought.

Source:https://www.globalmarketastro.com/blog/relative-strength-index-rsi-technical-indicator/