TECHNICAL ANALYSIS

WHAT IS TECHNICAL ANALYSIS?

It is the study of any market that uses price
and volume information only in order to
forecast future price movement and trends.
Technical analysts rely on historical and
current price and volume information only.
HOW IT IS DONE?
1. Charts
2. Patterns
3. Indicators

PRICE AND VOLUME

BASICS
Price Charting

Bar Charts
Line Charts
Candle sticks

PRICE AND VOLUME

BASICS
Bar Charts:

PRICE AND VOLUME BASICS

Line Chart

PRICE AND VOLUME

BASICS

Candle Sticks

Candle Sticks

Candle Sticks

Volume
Volume expands in the direction of trend
Volume changes tend to precedes price
changes
Look at bigger vol. days in upswing and
larger vol. total in downswing

Volume
Vol. should increase in the direction of dominant trend
On Balance Volume: Changes in OBV precede price changes
Example:

Assume we started with a stock that traded 1 million shares on

day 1. If the stock closes higher the next day and 750,000
shares are traded, day 2s volume figure is added to the first
day and assigned a positive number, as our running total is so
far a positive number, with OBV on day 2 at +1,750,000.
[Note: OBV would be a negative number, if our example stock
closed lower on day 2, on 1,500,000 shares: OBV would be
500,000.] On day 3 the stock closes lower on 500,000 shares
and we subtract that days volume from our cumulative OBV
total: On day 3, OBV is +1,250,000. When the stock is
unchanged in price on day 4, we leave OBV unchanged at
+1,250,000. This continues on into the future.

Volume

Direction of OBV is the primary concern;

whether the line is moving up or down.
Check out the Price-OBV divergence.

TRENDS
Trend could be: upwards, downwards,
sideways.

TRENDS

TRENDLINES

TRENDLINES

CONFIRMATION AND
DIVERGENCE

SUPPORT AND RESISTANCE

SUPPORT AND
RESISTANCE

CHART PATTERNS
Reversal Patterns:
Double and triple tops or bottoms
W bottoms or M tops
V tops or bottoms
Rounding tops and rounding bottoms
The head and shoulders pattern
Rectangles
Wedges
Triangles
Broadening tops or bottoms
Breakaway and exhaustion gaps

REVERSAL PATTERNS

TRIPLE TOP

DOUBLE BOTTOM

TRIPLE BOTTOM

DOUBLE TOP

TRIPLE TOP

HEADS AND SHOULDERS

HEADS AND SHOULDERS

HEADS AND SHOULDERS

HEADS AND SHOULDERS

HEADS AND SHOULDERS

ROUNDING TOPS AND

BOTTOMS

ROUNDING TOPS AND

BOTTOMS

CONTINUATION
PATTERNS
Flags
Most triangles
Most rectanglesvirtually the same
as a line formation
Runaway and measuring gaps

RECTANGLE

GAPS (Price)

GAPS (Exhaustion &

Runaway)

TRIANGLES

FLAGS

TECHNICAL
INDICATORS

TECHNICAL INDICATORS
(MOVING AVERAGE)

TECHNICAL INDICATORS
(MOVING AVERAGE)

TECHNICAL INDICATORS
(TYPES OF MOVING AVERAGE)

SUPPORT AND RESISTANCE FOR

MOVING AVERAGES

SUPPORT AND RESISTANCE FOR

MOVING AVERAGES

MOVING AVERAGE WITH OTHER

TOOLS
Bearish Trend
Reversal
is indicated
by this upside
breakout

MOVING AVERAGE
CROSSOVERS

BOLLINGER BANDS

BOLLINGER BANDS

OSCILLATORS

OSCILLATORS

MOVING AVERAGE
CONVERGANCE DIVERGANCE (MACD)

MOVING AVERAGE
CONVERGANCE DIVERGANCE (MACD)

RELATIVE STRENGTH
INDEX

RELATIVE STRENGTH
INDEX

RELATIVE STRENGTH
INDEX

RELATIVE STRENGTH
INDEX

RELATIVE STRENGTH
INDEX

RELATIVE STRENGTH
INDEX (RSI)

RELATIVE STRENGTH
INDEX (RSI)

RELATIVE STRENGTH
INDEX (RSI)

RSI
DIVERGENCE

RSI
DIVERGENCE