5.+Technical+Analysis

=Technical Analysis= Markets never go up or down in a straight line. As a result, investors use technical analysis to try and predict future prices. This type of analysis uses chart patterns to analyze historical prices and volume. Essentially a stock will either continue its current direction (known as a continuation trend or momentum) or change direction (known as a reversal).


 * ===[|What are Charts?] - What are charts? What is your time frame? How are charts formed? What chart scale to use?===
 * ===[|Support and Resistance] - What support and resistance are, where they are established, and methods used.===
 * ===[|Trend Lines] - What trend lines are, scale settings, validation, angles, and more.===
 * ===[|Gaps and Gap Analysis] - a gap is an area on a price chart in which there were no trades. Gaps show that something important has happened to the fundamentals of or the mass psychology surrounding a stock.===
 * ===[|Introduction to Chart Patterns] - a brief review of what chart patterns are, and how to recognize them.===
 * ===[|Chart Patterns] - a collection of articles describing common chart patterns.===
 * ===[|Chart Patterns] - explanation of the major technical analysis indicators===
 * ===[|Chart Assistance] - collections of charts from other investors with their technical analysis (good for learning and investment ideas)===
 * ===Public Charts and public blogs (blog1, blog2) are great ways to learn about charts is to use charts that have been annotated by other investors.===

=Sentiment Analysis= Sentiment is important to consider when analyzing a stock (link). Sentiment is how people "feel" about a stock. This is very important because the stock price is based on the supply and demand between all investors. If people don't have a positive view, then the stock price will not likely rise. In addition, if everyone already loves (and owns) a stock, then the stock will also not likely rise. Who is left to buy the stock? Items to consider when trying to understand sentiment are:
 * short interest (the number of shares that are shorted)
 * percentage of analysts with a "buy" rating on the stock (buy recommendation cause a stock to rise)
 * average daily volume as a percentage of shares outstanding (popular and larger companies trade more)
 * overall put/call ratio (this is the number of put options relative to the number of call options)
 * stock price as a percentage of 52 week high (this is a rough indication of the stock's momentum)
 * institutional ownership (how much of the outstanding stock is controlled by large financial firms)
 * Individual Investor Opinion ([|NASDAQ])

It is important to understand when a stock is trending and the strength of the trend. Gaps are also an important component of stock charts.

Chart Patterns – Trend

 * [|Uptrend]
 * [|Downtrend]

Chart Patterns – Gaps

 * [|Common Gap]
 * [|Breakaway Gap]
 * [|Runaway Gap]
 * [|Exhaustion Gap]

Chart Patterns – Continuation Patterns
Continuation patterns are chart patterns which set up the stock for a follow through move in the direction of the prior trend. Continuation chart patterns include all of the patterns listed below.
 * [|Cup and Handle]
 * [|Flag Patterns]
 * [|Bull Flag]
 * [|Bear Flag]
 * [|Pennant Patterns]
 * [|Bull Pennant]
 * [|Bear Pennant]
 * [|Triangle Patterns]
 * [|Symmetrical Triangle]
 * [|Ascending Triangle]
 * [|Descending Triangle]
 * [|Channeling Stock]
 * [|Descending Channel]
 * [|Ascending Channel]
 * [|Rectangle Pattern]

Chart Patterns – Reversal Patterns
Reversal patterns are chart patterns which reverse the trend of a stock once the pattern is confirmed. Reversal patterns include all of the patterns listed below.
 * [|Double Top]
 * [|Double Bottom]
 * [|Head and Shoulders Top]
 * [|Head and Shoulders Bottom]
 * [|Wedge Patterns]
 * [|Falling Wedge]
 * [|Rising Wedge]
 * [|Rounded Bottom]
 * [|Triple Top]
 * [|Triple Bottom]

Candlestick Chart Patterns

 * [|Bullish]
 * [|Bearish]

Other Candlestick Links

 * [|Introduction to Candlesticks] - An overview of candlesticks, including history, formation, and key patterns.
 * [|Candlesticks and Support] - How candlestick chart patterns can mark support levels.
 * [|Candlesticks and Resistance] - How candlestick chart patterns can mark resistance levels.
 * [|Candlestick Bullish Reversal Patterns] - Detailed descriptions of bullish reversal candlestick patterns
 * [|Candlestick Bearish Reversal Patterns] - Detailed descriptions of common bearish reversal candlestick patterns.
 * [|Candlestick Pattern Dictionary] - A comprehensive list of common candlestick patterns.