They evaluate the position of the security or index. In technical analysis we look for divergence between indicators and continuity between indicators, all in an effort to determine the validity of a trend. It is important to understand that technical analysis measure the mass of investors or mass psychology. These indicators do not measure what a select few are doing. The theory underlying these indicators is that once a trend is in motion it will continue in that direction.
Technical analysis attempts to determine the strength of the trend and the direction of the trend.
The technical analyst will attempt to identify the trend or the change in trend early. The technical analyst will also use his analysis to stay away from a market or a security unless there is a good amount of protection in place. On the other hand, a very dear friend of mine called me up one day and told me that his firm had just taken a position in one particular stock. He asked me what I thought. I told him that I would have waited until it bottomed at 51.