Technical Decline

Technical Decline
A technical decline is a fall in the price of a security caused by factors other than a change in the fundamental value of the security. Typically a security is said to experience a technical decline when the security or the overall market are trending upwards overall and the price dips downward based on technical factors. Generally the connotation is that a technical decline will prove to be only a momentarily dip in demand, followed by an appreciation back to the fair market value suggested by business fundamentals.

Proponents of the efficient market hypothesis dismiss the concept of a technical decline as being inconsistent with what they see as the rational price-setting mechanisms of the stock market. These theorists contend that if the price of a security were to deviate significantly from its fundamental value, market participants would quickly recognize an opportunity for profits and buy the security, increasing its price until it returns to its fundamental value. By contrast, many other investors believe that with sufficient research, it is possible to identify temporary windows in which undervalued securities can be bought, allowing for significant gains from the return to fundamental value.

Investment dictionary. . 2012.

Игры ⚽ Поможем сделать НИР

Look at other dictionaries:

  • technical decline — /ˌteknɪk(ə)l dɪ klaɪn/ noun a fall in share prices because of technical analysis …   Dictionary of banking and finance

  • Technical analysis — Financial markets Public market Exchange Securities Bond market Fixed income Corporate bond Government bond Municipal bond …   Wikipedia

  • Decline of the Roman Empire — This article is about the historiography of the decline of the Roman Empire. For a description of events, see Roman Empire. For the book by Edward Gibbon, see The History of the Decline and Fall of the Roman Empire. For the film, see The Fall of… …   Wikipedia

  • decline — 1 noun (singular, uncountable) a gradual decrease in the quality, quantity, or importance of something (+ in): a sharp decline in profits | economic/moral etc decline: Economic decline is often tangled up with political turmoil. | fall/go into… …   Longman dictionary of contemporary English

  • Advance/Decline Index — A technical analysis tool that represents the total difference between the number of advancing and declining security prices. This index is considered one of the best indicators of market movements as a whole. Stock indexes such as the Dow Jones… …   Investment dictionary

  • Ottawa Technical High School — The former home of Ottawa Tech Ottawa Technical High School, more often known as Ottawa Tech, was a high school in Ottawa, Canada that originally specialized in vocational programs. The school opened in 1913 as the second public secondary school… …   Wikipedia

  • J. M. Wright Technical High School — J.M. Wright Technical High School, also known as J.M. Wright Vocational Technical School and, more familiarly, as Wright Tech , is a vocational high school run by the state of Connecticut in Stamford, Connecticut, United States. Enrollment at the …   Wikipedia

  • Oscillator (technical analysis) — An oscillator is a technical analysis indicator that varies over time within a band (above and below a center line, or between set levels). Oscillators are used to discover short term overbought or oversold conditions. Common oscillators are MACD …   Wikipedia

  • Memphis Technical High School — To the stars through striving Address 1266 Poplar Avenue Memphis, Tennessee …   Wikipedia

  • Advance/Decline Line - A/D — A technical indicator that plots changes in the value of the advance decline index over a certain time period. Each point on the chart is calculated by taking the difference between the number of advancing/declining issues and adding the result… …   Investment dictionary

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”