Technical
Calculate and Interpret Pivot Points
Pivot points are technical indicators used to predict the support and resistance levels and to offer cues for trade execution. Pivot point calculations are derived from previous day trading prices and can help traders spot key levels that, when broken, may indicate a breakout (prices passing through areas of support or resistance toward [...]
A Fibonacci Calculator for Retracement and Projections
In finance, Fibonacci analysis, or the “Golden Ratio”, forms the basis of a popular approach to technical analysis. The idea behind Fibonacci analysis is that the price movements of market-traded securities demonstrate relationships to Fibonacci numbers, which start with 0 and form a sequence by summing the previous two numbers in the series. [...]
The Basic Tenets of the Dow Theory
The Dow Theory is a theory of stock market analysis that relies on the performance of the Dow Jones Industrial Average (DJIA) and the Transportation averages. The theory was formulated by Charles H. Dow through a series of editorials in the Wall Street Journal over a two-year period from 1900–1902. [...]
Identifying Support and Resistance Levels in Technical Analysis
Support and resistance are concepts employed by technical analysts to identify and exploit stock price trends. The idea is that the price of a stock tends to stop and reverse direction at certain price levels. The support level is where the stock price is likely to break its fall and bounce back up. Resistance, [...]
The Short Interest Ratio and Technical Analysis
The short interest ratio or “short ratio” is a sentiment indicator primarily used by technical investors to represent how many days of average volume it would take for all short positions to be repurchased. The ratio is calculated as the total number of shares sold short (short interest) divided by average daily volume. As [...]
Understanding the 200 Day Moving Average
Moving averages can help investors to understand the current direction of any particular stock. While short-term moving averages are used to gauge the shorter-term direction, longer-term moving averages can offer investors a more complete picture. Generally speaking, a stock that breaks the 200-day moving average on its way up is seen as being [...]
A Relative Strength Investing Strategy
Relative strength, also known as “price persistence”, is a measure used by many technical analysts to help them understand the direction and momentum of a stock. The term relative strength refers to how a stock is performing relative to something else, typically an index, an industry or another stock. A stock’s relative strength is expressed [...]
Investing and Market Sentiment
Market sentiment is a measure of the general mood of investors as to the expected price direction of the stock market. Market sentiment is, in fact, one of the most significant factors that drive the short-term stock market price movements. Simply stated, rising prices would indicate a bullish market sentiment while decreasing prices demonstrate a [...]
Trading Volume and Technical Analysis
Trading volume is one of the most basic concepts to understand for the technical investor. The trading volume for any particular security is simply the number of shares or contracts traded in that security over a given period of time. In other words, a purchase or sale of that security creates volume. In [...]
How Swing Trading Works
Swing trading is a style of trading in which the trader seeks to capture gains in a stock within a one to several day time period. These traders are not interested in fundamental analysis but instead review price trends and patterns to find stocks with short-term price momentum. This is a completely techncial [...]
