Chartists have long used quantitative analysis to assess the momentum of a indice’s value. The techniques are numerous but each largely based on price and volume.

The aim of the techniques is to identify patterns that:

• Provide advanced warnings of trend reversals both up and down; and
• Provide supporting indicators of continuation of the current price trend.

The analysis is typically calculated from closing prices for a range of time intervals of daily, weekly and monthly. The length of the time interval impacts the rate of change in the price pattern. Pattern changes take longer to occur as the period increases.

Choice of periods can be related to your share strategy. A day trader may prefer short periods to actively trade a shares price gyration. Longer term strategies may be better suited to longer periods to reduce trading by avoiding temporary pattern reversals.

Market Shares provides charts of price patterns across a choice of time periods. The “Moving Average (MACD)” and ”Relative Strength Indicator (RSI)” each include quantitative buy and sell trade triggers.