Technical Analysis

Technical Analysis - Wesleyan Investment Group Technical...

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12/09/11 1 Wesleyan Investment Group Technical Analysis “Those who cannot remember the past are condemned to repeat it.” ~~ George Santayana
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12/09/11 2 What will be discussed 1. Introduction to Technical Analysis 2. The Bar Chart 3. The Candle Stick Chart 4. How to track a stock’s Momentum 1. Relative Strength Index 2. Moving Averages 3. Support/Resistance Levels 4. Bollinger Bands 1. Moving Average Convergence / Divergence (MACD) 2. Is Technical Analysis for you?
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12/09/11 3 What is Technical Analysis? There are two major types of analysis for predicting the performance of a company's stock - fundamental and technical. Technical analysis is a method of evaluating securities by analyzing statistics generated by market activity, past prices, and volume. Technical analysis looks for peaks, bottoms, trends, patterns, and other factors affecting a security's price movement. Once an investor has gathered and evaluated all the technical data, he/she will have an educated opinion on where the entry and exit points of a particular security exists.
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12/09/11 4 The Bar Chart As illustrated on the left, the top of the vertical line indicates the highest price a security traded at during the day, and the bottom represents the lowest price. The closing price is displayed on the right side of the bar and the opening price is shown on the left side of the bar.
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12/09/11 5 The Candle Stick Chart Similar to a bar chart, candlestick charts also display the open, close, daily high, and daily low. The difference is the use of color to show if the stock was up or down over the day
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12/09/11 6 What do the Candle Stick Chart Patterns Means? This is a bullish pattern, the stock opened at (or near) its low and closed near its high. The opposite of the pattern above, this is a bearish pattern. It indicates that the stock opened at (or near) its high and dropped substantially to closed near its low. Called "The Hammer," this is a bullish pattern only if it occurs after the stock price has dropped for several days. A Hammer is identified by a small body along with a large range. The theory is that this pattern can indicate a reversal in the downtrend is in the works. Called a "star,", it typically indicates a reversal and or indecision. There
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Technical Analysis - Wesleyan Investment Group Technical...

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