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Technical Analysis
Matt Kanterman
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Support and Resistance
Support and resistance levels are price levels
on the price graph where the increase or
decrease in price slows down or stalls all-
together.
Support and resistance levels can be used to
identify the short-term direction and potential
price action of a security.
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Support and Resistance
Support Level
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Support and Resistance
Resistance Level
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Support Can Equal Resistance
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Trading Range
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Trend Lines
Trend lines are lines that are drawn to show
the general direction of a market or a security.
Trend lines are more valid the more data
points they encompass.
Therefore, the longer term the trend, the more
valid it is.
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Trend Lines
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Trend Lines
Trend lines may ignore certain data points.
A best-fit line, ignoring a small collection of
data in a longer term chart, can still be valid
even though it does not fit all data points.
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Trend Lines
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Common Chart Patterns
Head and Shoulders
Outside Reversal
Double Top/Bottom Wedge
Flag/Pennant
Triangle
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Head and Shoulders Top
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Head and Shoulders Bottom
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Outside Reversal
Outside reversals occur when the price makes a new high and then
closes at the lows. A close near the lows usually signals a similar bearish
pattern.
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Double Top
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Double Bottom
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Falling Wedge
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Rising Wedge
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Flag
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Symmetrical Triangle
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Ascending Triangle
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Descending Triangle
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Patterns
Aside from the recognizable and named
patterns, there can be others.
Examples include:
Cycles
Fibonacci metrics
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Perfect Cycle
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Cycles
Cycles sometimes are more apparent when
you change the scale.
Switching from an arithmetic (normal
counting scale) to a semi-logarithmic or
logarithmic scale can make cycles more
apparent.
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Cycles
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Cycles
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Cycles
Cycles can also become more apparent by
smoothing out price actions using moving
averages.
The cycles thus show themselves, as the
market can in the very short-term become
destabilized and re-stabilize in a few trading
days.
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Cycles
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Cycles
There are other types of cycles too!!!
Calendar
Random cycles such as the election cycle
If you are interested, look up the Dow theory
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Cycles
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Cycles
Sell in May and go away!!
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Fibonacci Retracements
The Fibonacci Series is 0, 1, 1, 2, 3, 5, 8, 13, 21,34, 55, 89, 144, 233, 377, 610...
If you divide one number by the next, the
quotients converge to .618 or 61.8% If you divide one number by the second one after
it, the quotients converge to .382, or 38.2% (or 1-.618, which is weird and explained by chaos
theory) If you divide one number by three after it, the
quotients converge to .236 or 23.6%
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Fibonacci Retracements
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Fibonacci Arcs
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Fibonacci Fans
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Fibonacci Time Zones
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Sources
http://stockcharts.com/school/doku.php?id=c
hart_school:chart_analysis