Technical Analysis Reference Centre

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Tuesday, July 18, 2006

Tops & Bottoms, Failure Swings, Divergence

Traders watch for double tops or what Wilder referred to as "failure swings."

If the RSI makes a double top formation, with the first top above 70% and the second top below the first, you get a sell signal when the RSI falls below the level of the dip.

Conversely, a double bottom at or below 30% (with the first low below 30% and the second at or above the same level) gives you a buy signal when the RSI breaks above the previous peak.These failure swings can lead to divergences between the price action and the RSI.

For example, a divergence occurs when a market makes a new high or low, but the RSI fails to set a matching new high or low. A divergence can be an indication of an impending reversal. In Wilder's opinion, divergences are the most important signal provided by RSI

.http://www.chartfilter.com/reports/c39.htm

Tuesday, June 06, 2006

Technical Analysis of Stock Trends, 8th Edition

A Classic work on Technical Analysis, June 11, 2000
Reviewer:
Charles W. Martin, Jr. (Baldwinsville, NY United States) - See all my reviewsI read Edwards and McGee, Technical Analysis of Stock Market Trends with great enthusiasm. Here was a book that was originally written in the 1940's that is equally valid to anyone trying to play the stock market in the Twenty First Century. It also gave me insights into the wild times on Wall Street in the Roaring 20's, and taught me how the pros did stock manipulation and organized "bear traps." Understanding Wall Street irrational exuberance in 1928 helps a smart investor understand the irrational exuberance in 1999. I started reading and then using Technical Analysis because I found I couldn't make money on the market just using the fundamental analysis that my accounting professors taught me in business school. I bought stocks based on detailed analysis of the firm's fundamentals and then could not understand why the prices of my "smart" investments immediately dropped like a rock. Technical analysis provides an investor with insights into the market forces (supply and demand) that affect the rise and fall of stock prices and give a rational investor understanding of the psychology of the herd of investors.
Modern web technology available from Clearstation and E-trade take the drudgery out of the technical charting, and make it easy for an amateur investor to become an experienced technical chart reader. Edwards and McGee was the book that helped me develop this skill. I can not praise the authors of this book enough.

http://www.amazon.com/gp/product/0814406807/ref=pd_sim_b_3/104-7902098-9532714?%5Fencoding=UTF8&v=glance&n=283155

Technical Analysis of Stock Trends, 8th Edition

A Classic work on Technical Analysis, June 11, 2000
Reviewer:
Charles W. Martin, Jr. (Baldwinsville, NY United States) - See all my reviewsI read Edwards and McGee, Technical Analysis of Stock Market Trends with great enthusiasm. Here was a book that was originally written in the 1940's that is equally valid to anyone trying to play the stock market in the Twenty First Century. It also gave me insights into the wild times on Wall Street in the Roaring 20's, and taught me how the pros did stock manipulation and organized "bear traps." Understanding Wall Street irrational exuberance in 1928 helps a smart investor understand the irrational exuberance in 1999. I started reading and then using Technical Analysis because I found I couldn't make money on the market just using the fundamental analysis that my accounting professors taught me in business school. I bought stocks based on detailed analysis of the firm's fundamentals and then could not understand why the prices of my "smart" investments immediately dropped like a rock. Technical analysis provides an investor with insights into the market forces (supply and demand) that affect the rise and fall of stock prices and give a rational investor understanding of the psychology of the herd of investors.
Modern web technology available from Clearstation and E-trade take the drudgery out of the technical charting, and make it easy for an amateur investor to become an experienced technical chart reader. Edwards and McGee was the book that helped me develop this skill. I can not praise the authors of this book enough.

http://www.amazon.com/gp/product/0814406807/ref=pd_sim_b_3/104-7902098-9532714?%5Fencoding=UTF8&v=glance&n=283155

Tuesday, May 16, 2006

Asia Tiger - Filling lower gap first

Testing 17.5 to 16.5 cents support band. Gap at 17 cents created at the ened of 2005 will be filled. Short term rebounce to 20 cents if 17.5 to 16.5 support band remains intact.

Saturday, April 29, 2006

Aus Group - Testing uptrend support line soon


Major support band 32 to 31 cents. Breakdown from red uptrend will most probabily end the current uptrend run and see price heading down to support region between 28 cents to 26 cents.

Sunday, April 23, 2006

China Sun - Hammer spotted ?


Requires confirmation tomorrow. Support gap is at 89.5 cents to 90.5 cents. Hammer upper shadow resistance is 95.5 cents.

Saturday, April 22, 2006

Andrew's Pitchfork

Description
Andrews' Pitchfork is a line study consisting of three parallel lines. The lines are drawn from three points that you select.

The three trendlines are drawn as follows:

The first trendline begins at the left-most point selected and is drawn so it passes directly between the right-most points. This line is the handle of the pitchfork.
The second and third trendlines are then drawn beginning at the right-most points and are drawn parallel to the first line. These lines are the tines of the pitchfork.

Interpretation
The interpretation of a Pitchfork is based on normal trendline support and resistance principles.

http://www.paritech.com/education/technical/indicators/support/andrews.asp

Tuesday, April 18, 2006

Andrews' Pitchfork

Back in the 1960s, Dr. Alan H. Andrews launched a one-of-a-kind home study course for stock and commodity traders. His idea was "to help investors gain confidence in the wonderful order underlying random change." He aimed his course at "traders with common sense, and a deep desire to become wealthy." In the course, and at seminars for course members, Dr. Andrews taught the fine points of his "Action/Reaction" techniques. One of those techniques was "The Pitchfork." It was to become his namesake. Originally called the "Median Line Study," it is included today in several well-known computer charting programs. The "Andrews' Pitchfork," as it is called these days, is a powerful set of chart lines drawn at uncommon places on a price chart. When linked together, the arrangement of lines closely resembles a farmer's pitchfork. So, that's what people started calling his median line study...."Andrews' Pitchfork." But his trading course covered a lot more ground than just "The Pitchfork." The course theme was based on the "Law of Action and Reaction," as suggested to him by a close friend, Roger Babson, to whom he gave much of the credit for his findings. Mr. Babson, the author of several business and finance books, was regarded as a foremost authority on the application of "Newtons' Action and Reaction Law," as it related to business cycles and stock market price swings. Dr. Andrews stopped offering his course several years ago because of his advancing years and failing health. He has since passed away. I was privileged to become acquainted with Dr. Andrews through his course and at his advanced seminars.

http://www.pitchforkprimer.com/