Technical Analysis of Stocks using GPT4 vision (2024)

Technical analysis of stocks involves evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Unlike fundamental analysis, which looks at company data such as earnings and financial statements, technical analysis focuses on the study of price movements.

Using GPT-4's vision capabilities, technical analysis can be enhanced by processing visual data such as charts and graphs. This AI model can interpret chart patterns, identify trend lines, and even recognize indicators like moving averages, RSI, or MACD from images of stock charts. Traders use these patterns and indicators to predict future market movements and make trading decisions based on perceived trends and momentum within the market. However, it's important to remember that no analytical method can guarantee future results, and combining both technical and fundamental analysis is often considered a more robust approach to evaluating investment opportunities.

Example#1 : Analysing the charts based on support, trend and volume

Prompt : Perform Technical analysis for investment insights. Keep it brief

GPT4 vision Answer :

1. Trend: Stock had an upward trend until September, and since then, it's on a downward trend.
2. Support/Resistance: Strong support at ₹375 and resistance around ₹445.
3. Volume: High volume on significant price moves, indicating strong buying/selling pressure.
4. Patterns: Double top pattern observed, indicating a bearish reversal.
5. Recent Activity: Price has declined recently; watch the ₹375 support level.

Recommendation: Currently in a downtrend. Consider waiting for bullish signals before buying. Set stop-loss around ₹375 if holding. Always consult further before investing.

Example#2 : Analysing the charts based on moving averages and bollinger bands

Prompt : Perform Technical analysis for investment insights. Keep it brief

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GPT4 vision Answer :

1. Trend: INFOSYS has been on a downtrend since September.
2. Support/Resistance: Near a support at ₹1331.75. Recent resistance observed around ₹1515.26.
3. Moving Averages: Stock is below the 20-day SMA (₹1423.50), indicating a bearish sentiment.
4. Bollinger Bands: Stock is moving towards the lower band, suggesting potential oversold conditions.
5. Volume: Moderate trading volume recently.

Recommendation: INFOSYS is currently bearish. Consider monitoring if the stock bounces off the ₹1331.75 support. If it breaches, wait for further bearish confirmation before shorting. For long positions, seek bullish reversal signs. Always consult further before making investment decisions.

Example#3 : Analysing the charts based on RSI and MACD

Prompt : Perform Technical analysis for investment insights. Keep it brief

GPT4 vision Answer :

1. Trend: YES BANK appears to be on a downtrend since September.
2. Support/Resistance: Trading near ₹16.05, which might act as a support level. Prior resistance is observed near ₹19.
3. RSI: Stands at 32.79, nearing the oversold territory (below 30). This could indicate potential buying opportunities if other indicators align.
4. MACD: The MACD line is below the signal line and both are below zero, indicating a bearish sentiment.
5. Volume: Not visible in the provided chart, but it's important to consider for confirmation of any trend.

Recommendation: YES BANK is currently showing bearish indicators, but the low RSI suggests it may be nearing oversold conditions. Consider monitoring for potential buy signals if the RSI dips further and there's a bullish divergence. However, for long-term decisions, always evaluate the bank's fundamentals and consult with a financial advisor.