Techinical Analysis

support line
resistant line
trend must be confirmed by same-trend volume.

Moving average according to peak cycle
Characteristics: lagging indicator
Usage: confirm price trends.
Period chosen:common 9/10,18/20,40/50,100/200 why?
or mostly to be cycle of the instrument.
Note:MA must be use in concurrent with price.
use two MAs
Signal: buy if short-term(ST) cross from below to above AND price is above cross point
sell if short-term(ST) cross from above to below AND price is below cross point
Special cases: Golden Cross, Death Cross.
short MA fall below long MA imply a bearish trend in which volume is low
conversing indicating a hold position

Candle light
filled:
closing price lower than opening:bearish?
MACD
sell when MACD falls below its signal line
buy when above
RSI
when RSI reaches its peak and start to fall -> signal to start selling
when it rebounds from a trough -> price tends to start rising
divergence pattern

Stochastic Oscillator
%K rise above %D: uptrend
%K fall below %D: downtrend
whipsaw condition: buy/sell signal reverse quickly redering signals invalid.
not rising above 20% mark, no significant change -> may hold.
Chart analysis
triangle
wedge
flags
pennants
head and shoulders
double/triple top/bottom
Cup and Handle
Cup & Handle: Cup should last about 1 to six months, have depth less than 2/3 of previous advance.Handle lasts up to a month, depth up to 1/3 of the cup advance.
price expect to rise from cup trough to right end if accompagny with high volume.
predict from last days

Volume is a useful measure of the strength of price movements. high volume acts as a confirmation of price direction.Low tends to be a warning of lack of interest at that price level,hence a risk of price direction change.

if prices are in uptrends and volume rises when price rises and falls when price falls, volume is confirming the trends.

Uptrend: time to buy or go long. Bull market.

Downtrend: time to sell or go short. Bearish: selling with a view to buying later.
(in equity market normal investors may not go short -> either be in or out the market)

uptrend:
Description: three consecutive rising low points.
Signal: break up: strengthen
break down: warning of reversal.

downtrend:
Decription: three consecutive falling high points
Signal:
break up: warns the possible end of downtrend.

Reversal: p.62

Triangles:
Common:to see the breakout of a triangle following an uptrend gives rise to a short sharp rise before a price fall occurs - bull traps.
if it's a downtrend - bear trap.

Rectangles:
If breakout follows the direction of the trend, then price will continue to rise, but if the breankout is in the opposite direction then it should be considered a major reversal pattern.
Sometimes after breakout there may be pull back.
Gaps: indication of a bull/bear market conviction which is so strong that a given price range has been completely ignored.

Head and shoulders:
Confirmation: at the right shoulder, the volume must decline.
signal: price break below the neckline - strong indication that price will fall.
Inverse head and shoulders in an equity market is less pronounced.
How much profit y to take after breakout: y = x where x is the difference bwt head and neckline.

Double top/bottoms:
Signal: intermediate or longterm changes in trend. Eventually buyers of sellers win and the trend is reversed.

Extra:
Bollinger bands.