technical analysis

Technical Analysis

Tim Backstrom15/11-2012

Election Results for Committee Positions

• 19 Candidates

– Judged on experience

– Perceived knowledge

– Commitment• Honorary Members:

– Ross Hutchison

– Kaustav Sawhny

– Sarah Rainey• IT:

• Gabrielė Kreišmonaitė

Content

1. Background

2. Basic Principles

3. Dow’s Theory (Summary)

4. Technical Indicators

5. Summary

Introduction to Technical Analysis

— Charles H. Dow— Dow’s theory

Background

“Market never rests”

Introduction to Technical Analysis

— An attempt to mathematically or visually explain group behaviour— Market psychology— Patterns— Trends— Resistance

Basic Principles

Introduction to Technical Analysis

— Market has three movements— Primary movement (Bull/Bear)— The “medium swing”— The “short swing”

— Market trends have three phases— 1. Investors “in the know” actively buying/selling against market— 2. Trend followers come in— 3. Investors cash in because market is moving on speculation

— Volume confirms are price rise/drop

Dow’s Theory (Short Summary)

Introduction to Technical Analysis

— Moving Average— Relative Strength Index— Bollinger bands— Resistance— Formations

Technical Indicators

Introduction to Technical Analysis

— General trend— Period

— Short (10-30 days) — Medium (30-90 days)— Long (90+ days)

— Indicators— Short cuts long from below (positive)— Short cuts long from above (negative)

Moving Average

Introduction to Technical Analysis

— Compares magnitude of recent gains to recent losses of an asset— Number of days up/number of days down

— The higher the RSI the less profitable— Overbought at 70— Oversold at 30

Relative Strength Index (RSI)

Introduction to Technical Analysis

— Reflects volatility in market— Price break— Indicated future movement

Bollinger Bands

Introduction to Technical Analysis

— Basic market psychology— If breaks through – BUY/SELL

Resistance

Introduction to Technical Analysis

— Head/shoulder— Double dip— Double top

Formations

Introduction to Technical Analysis

— Combine strategies and indicators for best result— Use as complement to fundamental analysis— Be consistent— Be patient

Summary

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