Technical Analysis

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MarketWatch  Aug 17  Comment 
Low quality earnings growth and fears of divergence keeping investors cautious as bull market ages
Motley Fool  Aug 17  Comment 
A mathematical model originally designed for monitoring seismic activity can be applied to the financial markets. It seems to work well -- but what if it works too well?
MarketWatch  Aug 15  Comment 
The stock market's recent strength has forced the McClellan Market Report's Tom McClellan to put his bearish stance on hold for the time being, but he still believes the market is due for a significant downtrend over the coming weeks. McClellan...
Capital Essence's Investment Blog- 錢途集團 » Page not found  Aug 13  Comment 
This is Capital Essence's CEM News - Market Outlook (the technical analysis of financial markets) for August 13, 2014. ...our “U.S. Market ETF Trading Map” rates the S&P as a Sell. As expected, the index sold off after the oversold...
Yahoo  Aug 13  Comment 
Stocks have been taking a beating over the past month -- but one technical indicator suggests they could now be a buy.
SeekingAlpha  Aug 13  Comment 
SeekingAlpha  Aug 12  Comment 
Astrology fascinated some of the most brilliant minds of the past. They included Galileo and Kepler. Today some lesser lights devote much effort and time to technical analysis of the Stock Market. In both cases, people are fascinated by the...
MarketWatch  Aug 12  Comment 
The S&P 500 Index and the Dow industrials have failed their first tests of well-defined resistance. The specific levels rest at each benchmark’s one-week range top — S&P 1,943 and Dow 16,588 — and these areas remain the immediate bull-bear...
The Market Financial  Aug 11  Comment 
Over the last few weeks we have seen the markets come under selling pressure. However, as of now, this pullback should not be considered a correction as we have seen these types of mild selling pressure come in several times before; only to see...
Canada.com  Aug 11  Comment 
As investors look for reasons behind the recent pullback in equity markets, technical analysis is getting a little more attention
Gold Stocks Today  Aug 9  Comment 
The rally is on! Let’s get straight into it by looking at the daily chart. I have added a Relative Strength Indicator (RSI) which shows a little bullish divergence. This week’s low was less weak than the previous week...




 
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Technical Analysis is the the study of the historical trend in an investment's price in order to predict future price movements.

Care must be taken when using technical analysis to be aware of fundamental events as they can invalidate prior technical analysis and cause large market shifts. In fact, a competing form of analysis is fundamental analysis.

The process of technical analysis can be applied to most markets including markets for commodities, securities, and currencies. Key concepts involved in technical analysis include: charts, support, resistance, trends and indicators.

Charts

Charts are graphical representations of market price and/or volume information in some time frame. For example, published charts generally provide hourly, daily or weekly data. One of the most common types of charts used for technical analysis is the Candlestick Chart. Formations, such as the commonly recognized Head and Shoulders pattern, can often be used to predict future price movement with a relatively high degree of accuracy.

Support Level

Support, within a particular time frame, is defined as a point at which a falling market price finds a bottom and does not fall any further. The price appears to bounce off of support levels and return to higher levels. There is no guarantee that a prior support level will continue to be a support level in the future.

Resistance Level

Resistance is similar to support. However, resistance is the point at which a rising market price finds a top and does not rise any further. Again, resistance may be applied to a time frame and of course a previous resistance level may fail to provide resistance in the future.

Trends

Market prices will often drift higher or lower in a series of waves. If a market is making higher highs and higher lows then it is generally considered to be trending up. If a market makes successively lower lows and lower highs then it is considered to be trending down.

It is often useful to draw a trend line along the levels of support and resistance. In particular, it is common for these trend lines to form a channel which can then be used to make trading decisions. Of course, a market may follow trend lines for a period of time but there is always the risk that it will stop doing so.

Indicators

Technical analysis often relies on the use of indicators. These indicators use mathematical formula to analyze price (and perhaps volume) action. Charts can be made using the indicator values and the information they provide can also be used to make trading decisions.

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