Technical

Calculate and Interpret the Stochastic Oscillator

A Stochastic Oscillator, also known as a Stochastic Indicator is used to compare the close price of a security to its trading range over a defined period of time. Developed by George Lane in the 1950’s, the indicator is used to measure price momentum through the examination of a pre-determined high to low range [...]

Calculate and Interpret the Money Flow Index

The money flow index (MFI) is an oscillating indicator used to determine the strength of a current price trend through the price and volume analysis of any particular security. The money flow index provides a line that moves between 0 and 100; the closer it moves to 100, the more strength in the price [...]

The Primary Technical Indicators in Technical Analysis

In technical analysis, technical indicators are used to predict how well a stock will perform in the future given current market conditions. A technical indicator is often used in an effort to anticipate short-term price trends- upward or downward movements- of a particular stock or the market as a whole. The two categories of [...]

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 [...]