Technical Analysis

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SeekingAlpha  Oct 17  Comment 
By Marc Chandler: If the worst of the market panic is behind us, it is worthwhile exercise to see what the charts are saying about the dollar. One advantage of technical analysis is that the fundamental causes and considerations behind the large...
Capital Essence's Investment Blog- 錢途集團 » Page not found  Oct 17  Comment 
This is Capital Essence's CEM News - Market Outlook (the technical analysis of financial markets) for October 17, 2014. ...our “U.S. Market ETF Trading Map” rates the S&P as a Sell. The index basing sideways using the bottom of its...
MarketWatch  Oct 14  Comment 
The October breakdown has inflicted significant technical damage, and an extended basing period is likely due — in the best case — before the U.S. markets’ next sustainable leg higher.
newratings.com  Oct 13  Comment 
WASHINGTON (dpa-AFX) - After showing a substantial move to the downside last week, stocks are likely to regain some ground in early trading on Monday. The major index futures are currently pointing to a higher open for the markets, with the Dow...
newratings.com  Oct 13  Comment 
BERLIN (dpa-AFX) - As risk aversion shakes the global financial markets and amid expectations that the global central banks are heading towards policy divergence, traders look forward to the unfolding week, sifting for clues on the economic...
SeekingAlpha  Oct 12  Comment 
By Marc Chandler: The underlying theme in the foreign exchange market is the divergence between the US and UK on one hand and the euro area and Japan on the other. That divergence, however, may not explain the developments in the other capital...
Benzinga  Oct 7  Comment 
Amazon.com, Inc. (NASDAQ: AMZN) shares have been hit recently and appear to have more room to fall. Can the stock –- and the market –- manage to recover in the short-term? What The Bulls See... • A price-to-sales ratio of...
MarketWatch  Oct 7  Comment 
The U.S. markets’ October price action remains distinctly technical, and bearish.




 
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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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