A Study on Rate of Change on In Technical Analysis

Abstract

Investment decision by investors can be based on the both fundamental and technical analysis.  It as a part of investment decision making of investors helps predicting the future share prices which can help in the formulating buying and selling decisions. It helps in identifying trend reversals at an earlier stage to formulate buying or selling strategy. It was a price movement of a security and uses this data to predict its futures price movement the paper aims at technical analysis of Dr. Reddys Lab, kotak Mahindra bank with in the closing share prices period 31/12/2018 to 25/01/2019.

Rate of change often used when speaking about momentum, and it can generally be expressed as a ratio between changes in one variable relative to a correspondent change in another; Technical analysis gives as many trading strategy, one of the which is using ROC indicator.  The rate of changes indicator is a momentum oscillator, which measures the percentage  changes between the current price and the n period past price. The ROC indicator might be used to conform price moves or detect diveregences; it might also used as a guide for determining overbought and oversold condition.