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SENSEX
An proponent of the 30 most actively trade windd stocks on the Bombay Stock Exchange (BSE). The Sensex is considered the most important benchmark index on the BSE, and it is the oldest stock index in India. Unlike some(prenominal) indices, it is not weighted for price or commercialise capitalization, precisely rather for free-float capitalization. This is similar to market capitalization, but uses sh bes available for trade rather than the total shares outstanding. Thus, it excludes shares that have not been vested, among others. Sensex is formally cognise as the Bombay Exchange Sensitive Index.
DOW THEORY
Dow theory was formulated from a series of Wall Street Journal editorials authored by Charles H. Dow, which reflected Dows beliefs on how the stock market behaved and how the market could be utilize to measure the health of the business environment.
Dow believed that the stock market as a whole was a reliable measure of general business conditions within the economy and that by analyzing the overall market, one could accurately gauge those conditions and identify the direction of major market hacks and the likely direction of individual stocks.
The market discounts everything.
Dow theory uses trend analysis to determine which way the market is headed.
Primary trends are major market trends.
Secondary trends are corrections of the indigenous trend.
Primary trends are made up of three phases. For an upward trend, these phases are: the accumulation phase, the reality participation phase and the wasted phase. For a downward trend, the three phases are: the distribution phase, the public participation phase and the panic phase.
Market indexes must patronise each other. In other words, a major retrogression from a bull or bear market cannot be signaled unless both indexes (generally the...If you want to get a full essay, set up it on our website: Ordercustompaper.com
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