How to read Advanced Charts and Intraday trade on Groww | Fundamental Analysis vs Technical Analysis - YouTube

If we talk about the stock market, there are 2 types of people, one being long term investors and second traders

It is said to do proper research in any case, investors do a fundamental analysis and traders do technical analysis.

Today we will talk about technical analysis because many traders use different advanced charts

So this video is for the traders where we will differentiate fundamental and technical and will also discuss some indicators

I, Jagdeep Singh welcome you to the Groww youtube channel, please subscribe so that you do not miss our important videos

At first, we will talk about the difference between fundamental and technical where advanced charts are used

If you haven't explored advanced chart please do so, they are available on website as well as app

These are the screenshots of advanced charts on Groww.

Let's now start with the difference between fundamental and technical analysis.

Fundamental analysis is done by evaluating a business. I will not speak about the share price

and will always refer to the company's business and here you find the intrinsic value of the company

Intrinsic value is the lookout for business, profits, industry growth, expansion plans per share price

You will not be concerned with the market price of the share but with the business, financial statements

and the growth prospects after which you will take out the intrinsic value of the company.

Assume you calculated the intrinsic value of a company at 100 but is trading at 150. So according to your analysis, it should only be 100

and you will not buy it. Whereas for example you calculated the IV at 200 and it is trading at 100, you will buy it.

Let's now talk about technical analysis, the base of this analysis is the company's share price

meaning people understand trends and try to predict their future performance.

They perform analysis and predict its price through various indicators, trends, volume trading

In technical analysis, the price action meaning how the price has performed in the past

and how it is visible through charts and indicators

Let me explain by a live example. Let's suppose you want to perform fundamental or technical analysis of ITC

People performing fundamental analysis will see the company's business in tobacco, agri, FMCG

classmate brand, their hotel business and will add all the values of the business and calculate the intrinsic value.

The technical analyst will not see the company's business but will be focused on the share price.

After the share price, they will try to predict the future performance through charts, trends and indicators

As you can see the bar chart for ITC as on 9th March 2021

You can see the open, close, high, and low of the price. If I see 2:15, it opened on 206.75, closed on 207.6

You can see open, close, high, and low for the same on candlestick charts which is commonly used

The prices remain the same of opening at 206.75 and closing at 207.6 for 2:15 and this is the closing price for the time interval and not the day

If see the year chart from Oct to Nov, the price took support at Rs. 170.

and resistance was seen at 230 by Feb end and if you see a year chart you can identify major support and resistance

Now let's move onto the second part of the basics of technical analysis.

The first is the past price action of the company is the most reliable to predict the future price action

and if you can identify that trend you will be able to predict the future of the price action

Charts are the most important in technical analysis because it helps to identify trends and patterns

and if you want to perform technical analysis, then it is necessary to understand charts

Now, I'll talk about two important variables. The first being time-frame because people perform analysis in 1 month and 5 min time frame too

You have to understand your time frame because it is core to your analysis.

Next are the indicators which help identify trends and patterns

and hence time frame and indicators should be kept in mind and studied in detail

Let's now gather basic knowledge regarding types of charts like line, bar, candlestick

This is a line graph on any company, as you know, you can select 1 day, week, month, and year on Groww

Time is represented on the horizontal and price is plotted on the vertical axis

and when you hover at any point, you can know the date, time, and price at any point.

Line chart only tells you the price at a given point of time anything about open, close high, and low.

The bar chart is shown in green and in red which displays open, close, high, and low.

and now I will explain the reason behind the colours green and red.

Assum a share price close on Rs 90 and opened at Rs 100 the next day. So whenever open is higher than close, green bar is formed

and now assume after the whole day the closing is at 110 and low at 95

And a red bar is formed when the opening is lower than the closing.

So bar chart is beneficial to know the trading range of stock for the past few days.

The next is the most common and important type of chart, the candlestick chart

The candles tell us the same information as the bar chart of low, close, open, and high.

Candles can be seen in 1 min, 5 min, 1 day, or more and can know the trading range too

There are 2 parts of a candle, first is the body which tells us the intensity of buying/selling and the other are the wicks

For the filled candled, assume price closed at Rs 90 the previous day and opens at Rs 100 and the company makes a high of Rs 150.

The upper wick will be from 100 to 150. And the body will be according to price action and the low will be at the end of it.

To know more, you can visit the Groww website and click on advanced which would turn the chart into candlestick

and you can see the ranges and the time frames varying from 1 min, to 1 year

On Groww you can see two colours green and red

Let's now understand what is support and resistance.

Assume you see a chart for a stock you observe that whenever its price goes to 70 it bounces back

and this is the level of Rs 70 from which the price doesn't fall more, it bounces back and hence you can make out the support in any time frame

If we talk more technically, support is the price at which the stock has the highest demand.

and support price is always lower than the current market price, suppose a share price is 100 then support might be 90, 80 etc

Whereas resistance is the total opposite of support, assuming share price at 100and it goes to 120 and falls

and is not able to breach that level, and hence if it crosses its resistance the price may go up.

So the resistance is the price at which the company has the most sellers.

It is observed that a company trades between its support and resistance and basis that analysts make out their ideas

Let me now tell you the use of these on Groww, as after clicking advanced you get the technical chart

On the top, you will be able to see the option charts and can choose from a list of them.

and we have kept the indicators that are normally used.

So you can use the type of chart and indicators which you are comfortable with and perform technical analysis.

and the benefit is that you can buy/sell from the same page itself.