Browsing articles in "Technical Analysis"
Jul
23
2015

Make technical analysis work for you !!!

Technical analysis

When we hear about technical and fundamental analysis it does sound great as a subject to study and to steal our interest. But when it comes to investing with stocks, we as a common investor look for so-called brokers or advisors for telling us what to buy and what not. So here I would like to break the mis-conception that these analysis tools are not like middle school mathematics that we just study but never […]

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Apr
21
2015

Using candlestick charts for technical analysis

Technical analysis

While taking trade/investment decisions we should always do a fair amount of technical/fundamental analysis to eliminate the risk of ignorance and not following the herd. We can train ourselves in any of these (if not both) to do the analysis. So if you are a technical analyst then there are some major patterns that help you catch hidden and potential opportunities. To begin with there are patterns like: Double top pattern Stock market gaps Double […]

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Apr
6
2013

Trading a double top pattern:

Technical analysis

Double top pattern is one of the trend reversal patterns which indicate that the prevailing uptrend has come to an end and signals a downtrend. It is formed when an uptrend reaches towards its end. The pattern is characterized by two peaks formed approximately at similar height. It is formed when the price level of the security tests the resistance level twice and then breaks down the support level to start a new downtrend. The […]

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Mar
30
2013

Stock Market Gaps:

stock market gaps

Gaps occur when the area on the price chart of stocks are left blank between the day’s opening level and the previous days’ close. Such an opening when the price levels vary from the previous days close creates gaps on price charts. These gaps represent the price levels where no trading takes place. The reason for such a pattern formation is the sudden change in supply or demand between the previous days’ close and present […]

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Feb
16
2013

TRADING DOUBLE BOTTOM PATTERN:

Technical Analysis_

Double bottom pattern is one of the most widely used and authentic chart pattern used to ensure that a present trend has been reversed or is reversing and trading positions could be taken accordingly. The pattern is formed when the price line tests the support level twice and bounces back upwards. The pattern is shown below:       The pattern consists of two bottoms which are formed each time the stock price tests the […]

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Feb
5
2013

Trend Analysis:

Financial analysis

While talking about financial statement analysis, trend analysis stands as the most commonly and widely used technique by even the novice investor. This method believes on looking back at the financial statement figures of a firm in order to get an idea of the trend being followed by them; and hence extrapolating the numbers to forecast the future movement. The method is based on the assumption that the past performance of a company taken for […]

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Jan
29
2013

MACD AS A BUY/SELL TOOL:

macd indicator

MACD stands for Moving Average Convergence Divergence. It is calculated by subtracting a longer moving average (26 day EMA) from a shorter moving average (12 day EMA). Here EMA stands for Exponential Moving Average. The longer moving average is less reactive or a slow moving one whereas; shorter moving average is more reactive average. It is formulated as: MACD = 12 Day EMA – 26 Day EMA However, analysts could use the EMAs other then 12 […]

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Jul
9
2012

Identifying support and resistance for stocks:

stocks support level

While trading in stocks one should be quite aware of the support and resistance levels being held by the stocks in order to identify an appropriate timing for entry and exit from the counter. The identification of these levels is absolutely an easy task. We could locate these points just by looking at the stock charts which are quite readily available on various financial websites.   Identify support levels: Let us take a recent example […]

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Jun
21
2012

Analysing Head and shoulders pattern:

Head and shoulders pattern

While deciding for a trading or positional call on a stock, one of the reliable and preferred method is analysing the chart pattern. One of the most widely used pattern is Head and Shoulders. As indicated by the name this pattern consists of a head and two shoulders on either side. Following is the simple representation of the pattern.       Thus, the pattern starts with a ‘left shoulder’ followed by a ‘head’ with […]

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May
11
2012

How to use RSI as a tool for technical analysis:

RSI

RSI or Relative Strength Index is a momentum oscillator used to identify upcoming trend in a stock. ‘Momentum oscillator’ refers to an indicator that gives an indication of the speed and change of the price pattern of a stock. This index was developed by J. Welles Wilder Jr. RSI is generally not used alone but alongwith other technical indicators to confirm a particular trend. Since it is an oscillator therefore the numeric value of the […]

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