Technical Managers Technical Managers
They believe that price is the only important variable to be analyzed and that the historical price pattern alone predicts the future direction of the stock price. Before computers, these managers plotted graphs of stock prices and analyzed the patterns of these charts according to their established rules. For example, a "head and shoulders" formation indicated that a price had peaked, dropped and then peaked again prior to falling off. This had historically shown that price was peaking and the market or stock would plunge in price or level. Other measures show market breadth, strength, trend and even conviction. Due to their use of charts, these analysts were known as "chartists" in days gone by. Now, computers have increased the ease and power of this form of analysis and management. Most investment dealers employ a technical analyst to provide market and stock commentary for their clients.
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