Prj Technical Analysis

8/14/2019 Prj Technical Analysis

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What is Technical Analysis?

Method of Evaluating securities by analyzing thestatistics generated by market activity, past prices& Volume

Do not measure the intrinsic value

It only Suggest future activity

Do not care whether a stock is undervalued


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3 Assumptions

The Market Discounts Everything Price moves in Trends

History tends to repeat itself


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Charts

-Ronak Doshi


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Charts

The Line Chart The Bar Chart

The Candlestick Chart

Point & Figure Chart


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The Line Chart


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The Bar Chart


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The Bar Chart

Red : Stock Goes Down

Black: Stock Goes Up


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Body Black or Red Stock Closed Lower

Body is White or Green Stock Closed Higher


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The Point & Figure Chart


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Example

High Low

Day 1 15 11

Day 2 12 11

Day 3 12 10

Day 4 15 11

Day 5 15 12


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High Low

Day 1 15 11

Day 2 12 11

Day 3 12 10

Day 4 15 11

Day 5 15 12

15 O

14 O

13 O

12 O

11 O

10

15 O

14 O

13 O

12 O

11 O

10

15 O

14 O

13 O

12 O

11 O

10 O

15 O X

14 O X

13 O X

12 O X

11 O X

10 O

15 O X

14 O X O

13 O X O

12 O X O

11 O X

10 O


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Key Points Before You Start:Remember, X's represent increasing

price. O's represent decreasingprice.You can only have X's or Os in anyone column, not both.

20

19

18 X X

17 X X O X O

16 X O X O X O

15 O X X O X O X O X

14 O X O X O O X O X O X

13 O X O X O O X O X O

12 O X O O X O X O

11 O X O O O

10 O


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Candlestick Patterns

-Viral Shah


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Hanging Man


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Shooting Star


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Hammer


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Inverted Hammer


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Doji


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Bullish Engulfing Pattern


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Bearish Engulfing Pattern


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Chart Patterns

H d d Sh ld


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Head and Shoulders

C d H dl


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Cup and Handle

D bl T d B tt


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Double Tops and Bottoms

T i l


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Triangles

Fl d P t


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Flag and Pennant

W d


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Wedge

GAPS AND GAP ANALYSIS


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GAPS AND GAP ANALYSIS

There are four main types of gaps: Common gap

Breakaway gap

Runaway gap

Exhaustion gap

T i l T d B tt


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Triple Tops and Bottoms

Rounding Bottom


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Rounding Bottom


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Trend lines

-Hitesh Chainani

Introduction


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Introduction

A trend is really nothing more than the general direction

in which a security or market is headed.

Trend


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Trend

In technical analysis, it is the movement of the highsand lows that constitutes a trend.

Example


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Example

Point 2 in the is the first high, which is determinedafter the price falls from this point. Point 3 is the lowthat is established as the price falls from the high.

Types of Trend


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Types of Trend

1. Uptrend

2. Downtrends

3. Sideways/Horizontal Trends

Trend Lengths


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Trend Lengths

1. Long-term trend:Longer than a year

2. Medium trend:

One and threemonths

3. Short-term trend:

Less than a month

Trend lines


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Trend lines

A trend line is a simple charting technique that adds a lineto a chart to represent the trend in the market or a stock.

An upward trendline is drawn at the lows of an upwardtrend. This line represents the support the stock hasevery time it moves from a high to a low.

Trend lines


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Trend lines

This type of trendline helps traders to anticipate thepoint at which a stock's price will begin movingupwards again.

Similarly, a downward trendline is drawn at the highsof the downward trend.

This line represents the resistance level that a stockfaces every time the price moves from a low to a high.

Channels


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Channels

A channel, or channel lines, is the addition of two parallel

trendlines that act as strong areas of support andresistance.

The upper trendline connects a series of highs, while thelower trendline connects a series of lows.

The Importance of Trend


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The Importance of Trend

The trend is your friend"

Don't buck the trend"

Why Does it Happen?


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Why Does it Happen?

These support and resistance levels are seen as

important in terms ofmarket psychology and supplyand demand.

These are levels at which a lot of traders are willing to:

Buy the stock (in the case of a support) or

Sell it (in the case of resistance).

When these trendlines are broken, the supply anddemand and the psychology behind the stock'smovements is thought to have shifted

Round Numbers


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Round Numbers

One type of universal support and resistance thattends to be seen across a large number of securitiesis round numbers.

Round numbers like 10, 20, 35, 50, 100 and 1,000

tend be important because they often represent themajor psychological turning points at which manytraders will make buy or sell decisions.

This is due to increased buying and selling

pressure at these levels

Role Reversal


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Role Reversal

Once a resistance or support level is broken, its role isreversed.

If the price falls below a support level, that level will

become resistance and vice versa. As the price moves past a level of support or

resistance, it is thought that supply and demand hasshifted, causing the breached level to reverse its role.

Role Reversal - Example


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Role Reversal - Example

As you can see in Figure, this phenomenon is evident

on the Wal-Mart Stores Inc chart between 2003 and2006.

Notice how the role of the $51 level changes from astrong level of support to a level of resistance

Importance of Support and Resistance


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Support and resistance analysis is an important partof trends because it can be used to make tradingdecisions and identify when a trend is reversing.

Traders should avoid placing orders at these majorpoints, as the area around them is usually marked bya lot of volatility.

This is because in many cases, the price never actuallyreaches the whole number, but flirts with it instead.



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It is important to follow this simple rule: do not placeorders directly at the support or resistance level.

So if you're bullish on a stock that is moving toward

an important support level, do not place the trade atthe support level.

Instead, place it above the support level, but within a

few points.


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Volume

What is Volume?


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What is Volume?

Volume is simply the number of shares or contracts

that trade over a given period of time, usually a day. The higher the volume, the more active the security.

Volume bars illustrate how many shares have tradedper period and show trends in the same way that

prices do.

Why is volume important?


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Say, for example, that a stock jumps 5% in onetrading day after being in a long downtrend.

Is this a sign of a trend reversal? This is where

volume helps traders.

If volume is high during the day relative to theaverage daily volume, it is a sign that the reversal is

probably for real.



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On the other hand, if the volume is below average,there may not be enough conviction to support a truetrend reversal.

When volume tells a different story, it is a case ofdivergence, which refers to a contradiction betweentwo different indicators.

The simplest example of divergence is a clear upwardtrend on declining volume.


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Moving Averages

-Suraj Purohit

Types of Moving Averages


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Types of Moving Averages

1. Simple Moving Average

2. Linear Moving Average

3. Exponential Moving Average

Simple Moving Average


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Simple Moving Average

Linear Moving Average


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ea o g e age

Formulae

Exponential Moving Average


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p g g

Major Uses of Moving Averages


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j g g

1. Identify Current Trends

2. Trend Reversals

3. Support & Resistance levels

Current Trends


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Trend Reversals


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Crossover


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Support & Resistance Levels


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pp


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Technical Indicators and

Oscillators

-Hiten Jain

What is an Indicator?


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A technical indicator is a series of data points thatare derived by applying a formula to the pricedata of a security.

Price data includes any combination of the open,high, low or close over a period of time.

What is an Oscillators?


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Types:


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y

Accumulation/Distribution Line

Average Directional Index Arron Aroon Indicator

Moving Average Convergence Divergence

Relative Strength Index On-Balance Volume

Stochastic Oscillator Bollinger Band Fibonacci Retracement Fibonacci Fan

Fibonacci Arc Rate of change (ROC) Regression

Eliot Wave

Relative Strength Index


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Bollinger Band


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A band plotted two standard deviations away from a simple

moving average, developed by famous technical trader JohnBollinger.


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Moving Average Convergence Divergence


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This indicator is comprised of two exponentialmoving averages, which help to measuremomentum in the security.

The MACD is simply the difference between thesetwo moving averages plotted against a centerline.

The centerline is the point at which the twomoving averages are equal.


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Prj Technical Analysis