Outline

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Outline

• Intro
• Candlestick Charting
• Support/Resistance, Trends, Retracements
• Famous Patterns
• Cup and Handle
• Head and Shoulders
• Moving Averages
• SMA, EMA
• Bollinger Bands
• MACD
• Current Outlook

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What is Technical Analysis?

• The study of market action, primarily through
  the use of charts, for the purpose of forecasting
  future price trends
• - John J. Murphy
• market witchcraft
• self-fulfilling prophecy
• Technical Analysis
• vs
• Fundamental Analysis

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Chart Types
Line Charts
Bar Charts
OHLC (American Candlestick)
Japanese Candlestick
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Candlesticks
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Candlestick Types
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Candlestick Patterns
Dark Cloud Cover - Bearish
Piercing Line - Bullish
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Candlestick Example
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Support and Resistance
Resistance
Support
Resistance
Support

• Once a support or resistance level is broken,
  its role reverses.
• Support and resistance levels become more
  significant the longer they are traded at and
  when the volume is high during the period that
  the level is traded at.

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Support and ResistanceExample
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Trendlines
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6
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9
2
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5
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Note Once a trendline is broken it will
assume the opposite role (support or resistance)
of that which it had before.
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Trendlines Example
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Fibonacci RetracementsExample
38.2
50
61.8
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Head and Shoulders
Head
Right Shoulder
Left Shoulder
Neckline
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Head and Shoulders Example
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Cup and Handle Example
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Moving Averages
The two most popular Forms of moving averages Are
the Simple and Exponential varieties (SMA and
EMA).
An SMA sums the closing prices of a given amount
of periods (such as 50 days in this graph) and
divides by that number of periods.
Resistance
Support
An EMA smoothes the curve, giving greater weight
to the most recent data points.
The most used MAs areSMA(10) SMA(50) SMA(100)SM
A(200) EMA(20)
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Bollinger Bands
Bollinger Bands are made by taking a MA (the 20
SMA is recommended by John Bollinger and the most
popular) and placing lines 2 standard deviations
above and below the MA.
Whenever a band is touched, it serves as an
indicator that the security is overextended and
will reverse.
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MACD Indicator
The Moving Average Convergence/Divergence
indicator uses two MAs for a security, typically
the 12 and 26 period EMAs like in this chart.
The difference found from subtracting the 26 EMA
from the 12 EMA is used to form the MACD line
(Red). The trigger line (Blue) is a 9 period EMA
of the previously calculated MACD line.
When the MACD line crosses above the trigger line
from below, it generates a buy signal. When the
MACD line crosses below the trigger line from
above, it generates a sell signal.
A histogram is often including on MACD plots to
make it easier to see by how much the two lines
are diverging and when convergence takes place.
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Current Outlook