Markov Trend Analysis predicts the likelihood of a stock's price movement (Positive, Negative, or Neutral) based on historical patterns using a Markov chain model:
Methodology: The stock and index (e.g., Nifty 50 or S&P 500) daily median prices are used to calculate percentage changes, labeled as Positive (P), Negative (N), or Neutral (X) based on a cut-off threshold.
Levels: Analyzes 3, 4, and 5-day sequences to compute transition probabilities for the next day's movement.
Output: Bar charts show probabilities for Positive, Negative, and Neutral movements for the stock and index, averaged across 3-, 4-, and 5-day sequences.
Usage: Helps identify potential trend directions based on historical price behavior.