GlossaryEditor
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The adaptive price zone is a tool of technical stock market analysis, which is contrasted with fundamental stock market analysis. In fundamental analysis, analysts base their judgments on the particular qualities of the companies being traded, such as their strength and solvency, as well as any recent announcements, developments, new products, or public relations campaigns. In technical analysis, analysts examine solely the movements of the market, without reference to the financial reports of the companies that make up the market. As a technical analysis tool, the adaptive price zone helps spot reversal points where a stock is likely to switch direction. These points often represent opportunities for significant gain for investors, especially for short-term investors and day traders.
