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.
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)
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.
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.
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: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
Chart Patterns – Gaps
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.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.Candlestick Chart Patterns
Other Candlestick Links