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    Technical Analysis: Presenter Venue Date

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    Mario
    Technical analysis uses charts and patterns to predict market behavior based on the assumption that market trends and human emotions are predictable. The chapter discusses various technical analysis tools including chart types like candlestick and line charts, indicators like moving averages and oscillators, and patterns like head and shoulders and triangles. It also covers cycles, Elliott wave theory, and intermarket analysis.

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    Technical Analysis: Presenter Venue Date

    Uploaded by

    Mario
    27 views35 pages
    Technical analysis uses charts and patterns to predict market behavior based on the assumption that market trends and human emotions are predictable. The chapter discusses various technical analysis tools including chart types like candlestick and line charts, indicators like moving averages and oscillators, and patterns like head and shoulders and triangles. It also covers cycles, Elliott wave theory, and intermarket analysis.

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    Original Title

    1.8 Technical Analysis

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    Technical analysis uses charts and patterns to predict market behavior based on the assumption that market trends and human emotions are predictable. The chapter discusses various technical analysis tools including chart types like candlestick and line charts, indicators like moving averages and oscillators, and patterns like head and shoulders and triangles. It also covers cycles, Elliott wave theory, and intermarket analysis.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    27 views35 pages

    Technical Analysis: Presenter Venue Date

    Uploaded by

    Mario
    Technical analysis uses charts and patterns to predict market behavior based on the assumption that market trends and human emotions are predictable. The chapter discusses various technical analysis tools including chart types like candlestick and line charts, indicators like moving averages and oscillators, and patterns like head and shoulders and triangles. It also covers cycles, Elliott wave theory, and intermarket analysis.

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    of 35

    CHAPTER 12

    TECHNICAL ANALYSIS
    Presenter
    Venue
    Date

    THE LOGIC OF TECHNICAL ANALYSIS

    Changes
    in supply
    and
    demand
    Supply and cause
    demand
    changes in
    determine prices
    prices

    Prices can
    be projected
    with charts
    and other
    technical
    tools

    ASSUMPTIONS OF TECHNICAL ANALYSIS


    Human behavior is often erratic and driven by
    emotion.

    Market trends and patterns reflect irrational


    human behavior.

    Trends and patterns repeat themselves and are


    thus predictable.

    CHARTS

    Line Chart
    Candlestick
    Chart
    Point
    and
    Bar Figure
    Chart
    Chart

    LINE CHARTS AND SCALE

    EXHIBIT 12-7 Dow Jones


    Industrial Average on a
    Linear Scale, 19282010
    (in U.S. dollars)

    EXHIBIT 12-8 Dow Jones


    Industrial Average on a
    Logarithmic Scale, 1928
    2010 (in U.S. dollars)

    BAR CHARTS

    EXHIBIT 12-2
    Bar Chart
    Notation

    EXHIBIT 12-3 Bar Chart: Bovespa


    Index, November 2007November
    2009 (price in Brazilian reals)

    CANDLESTICK CHARTS

    EXHIBIT 12-4
    Construction of a
    Candlestick Chart

    EXHIBIT 12-5 Candlestick Chart:


    Companhia Vale do Rio Doce, 1
    January 15 June 2009 (prices in U.S.
    dollars)

    POINT AND FIGURE CHARTS

    EXHIBIT 12-6 Point and Figure Chart: Wharf Holdings Daily Price Chart, 2007
    2009 (Hong Kong dollars)
    Note: The box size is HK$1, and the reversal size is three.

    PRICE AND VOLUME

    RELATIVE STRENGTH ANALYSIS

    EXHIBIT 12-10 Relative Strength Analysis: HOG vs. the S&P 500
    and RODM vs. the S&P 500, JanuaryJune 2009

    TREND ANALYSIS

    EXHIBIT 12-11 Trend Analysis: China Mobile Weekly Price Chart,


    20022010 (prices in Hong Kong dollars)

    SUPPORT AND RESISTANCE


    Price
    Resistance/Support
    Resistance Becomes Support
    Support

    CHART PATTERNS

    HEAD AND SHOULDERS

    EXHIBIT 12-13 Head and Shoulders Pattern: Marvell Technology Daily Price Chart, June
    2005June 2006 (price in U.S. dollars 100)

    (Head and Shoulders) Price target = Neckline (Head Neckline)


    (Inverse Head and Shoulders) Price target = Neckline + (Head Neckline)

    DOUBLE TOPS AND BOTTOMS

    EXHIBIT 12-16 Double-Bottom Pattern: Time Warner Daily Price Chart,


    November 2007October 2009 (price in U.S. dollars)

    TRIPLE TOPS AND BOTTOMS

    EXHIBIT 12-17 Triple-Top Pattern: Rockwell Automation Daily Price Chart, 1999
    (price in U.S. dollars)

    TRIANGLES

    EXHIBIT 12-18
    Ascending Triangle Pattern

    EXHIBIT 12-19
    Descending Triangle Pattern

    RECTANGLES

    EXHIBIT 12-21 Rectangle Patterns

    FLAGS AND PENNANTS

    EXHIBIT 12-22 Pennant Formation: China Mobile ADR,


    November 2006July 2009 (price in U.S. dollars)

    TECHNICAL INDICATORS

    PRICE-BASED INDICATOR: MOVING AVERAGE

    EXHIBIT12-23 Daily Price Chart with 20-Day and 60-Day Moving Averages:
    Gazprom EDR, November 2007August 2009 (price in euros)

    PRICE-BASED INDICATOR: BOLLINGER BAND

    EXHIBIT12-24 Bollinger Band Using 60-Day Moving Average and 2


    Standard Deviations: Gazprom EDR Daily Price Chart, November 2007
    August 2009 (price in euros)

    MOMENTUM OSCILLATOR: RATE OF CHANGE


    OSCILLATOR (M = V VX 100)

    EXHIBIT 12-25 Momentum Oscillator with 100 as Midpoint: Toyota Motor, May
    2008October 2009 (price in Japanese yen)

    MOMENTUM OSCILLATOR: RELATIVE


    STRENGTH INDEX
    100
    1 RS
    (Up changes for the period under consideration)

    RSI 100
    RS

    Down changes for the period under construction

    EXHIBIT 12- 27 Candlestick Chart with RSI: Ford, JanuaryAugust 2009 (price in U.S. dollars)

    MOMENTUM OSCILLATOR: STOCHASTIC


    OSCILLATOR

    C L14
    %K 100

    H 14 L14
    %D Average of the last three %K values calculated daily

    EXHIBIT 12-28 Weekly Price Chart and Stochastic Oscillator: Petroleo Brasileiro
    ADR, June 2008July 2009 (price in U.S. dollars)

    MOMENTUM OSCILLATOR: MACD OSCILLATOR

    EXHIBIT12-29 MACD and Daily Price Chart: Exxon Mobil, MarchNovember


    2005 (price in U.S. dollars)

    SENTIMENT INDICATOR: OPINION POLLS

    SENTIMENT INDICATOR: CALCULATED


    STATISTICAL INDICES

    FLOW-OF-FUNDS INDICATOR: ARMS INDEX


    (TRIN)
    Arms Index

    Number of advancing issues / Number of declining issues


    Volume of advancing issues / Volume of declining issues

    EXHIBIT12-32 Arms Index for the S&P 500, JanuaryJuly 2009

    OTHER FLOW-OF-FUNDS INDICATORS

    CYCLES

    ELLIOTT WAVE THEORY

    Fibonacci
    Sequence:
    0, 1, 1, 2, 3,
    5, 8, 13,
    21

    EXHIBIT 12-34 IMPULSE WAVES AND


    CORRECTIVE WAVES

    INTERMARKET ANALYSIS

    EXHIBIT 12-35 Relative Strength of 10-Year


    T-Bonds vs. S&P 500, September 2008July
    2009

    SUMMARY
    Principles, applications, and assumptions of
    technical analysis
    Construction and interpretation of charts
    Trend, support, and resistance lines, and change
    in polarity
    Common technical analysis patterns, indicators,
    and cycles
    Elliott Wave Theory
    Intermarket analysis

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