Technical Analysis

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Capital Essence's Investment Blog- 錢途集團 » Page not found  2 hrs ago  Comment 
This is Capital Essence's CEM News - Market Outlook (the technical analysis of financial markets) for November 26, 2014. ...our “U.S. Market ETF Trading Map” rates the S&P as a Buy. The index continues basing sideways near prior high. ...
MarketWatch  12 hrs ago  Comment 
The U..S. markets have taken flight against the backdrop of a seasonal tailwind.
Financial Times  Nov 25  Comment 
Some countries have cut interest rates to invigorate demand while others hiked rates to battle inflation
MarketWatch  Nov 24  Comment 
Crude oil’s bullish “Class A” technical divergence suggests a big rally may be right around the corner
Wall Street Journal  Nov 23  Comment 
The performance of corporate bonds, and a divergence between markets in the U.S. and Europe, should give stock investors pause.
Bloomberg  Nov 19  Comment 
Dollar Climbs to Seven-Year High Versus Yen on Policy Divergence The dollar reached a seven-year high against the yen as minutes from the Federal Reserve’s latest policy...
The Economic Times  Nov 19  Comment 
The dollar last traded at 117.35 yen, up 0.4 percent on the day. The euro was up 0.4 percent at 147.25 yen, its highest since late 2008.




 
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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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