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Technicals

Characteristic line

One important term in finance is the Characteristic Line, which is the regression line derived from regression analysis. This line showcases the estimated linear relationship between the dependent variable, the factor we aim to explain, and the independent variable, the factor we use to explain it.

For instance, if we want to explain IBM's return by using the Dow Jones Industrial Index, we can represent this relationship through a linear equation: RIBM = a + bRDow Jones. The line with an intercept of a and a slope of b is known as the characteristic equation.

Bottom Reversal

Market bottoms refer to a point in the stock market where prices hit a low and begin to trend upwards. This change in direction, known as a reversal, can be a key indicato...

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Bottom

As we delve into the complex world of finance, it is important to understand the concept of a "low point" in a downward trend. This refers to the point at which the value of...

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Sentiment Indicators

As a financial professional, it's important to keep a pulse on market sentiment. This can be achieved by analyzing indicators that reflect the attitudes of both individual i...

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Breakdown

When the market experiences a significant decline below a key support level or breaks out of a consolidation pattern, it is often due to an increase in selling pressure that...

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