Technical Analysis

In a fly-by-the-seat-of-the-pants operation, I’ve decided to break down the fundamentals of technical analysis to provide an overview as well as a source of reference.

Technical analysis can be broken down into three parts:

I.                    Overlays (things that go over your charts: averages, bands, channels, etc.)

II.                  Indicators (volume, momentum, accumulation, distribution, consolidation, etc.)

III.                Price Patterns (banners, pennants, flags, wedges, etc.)

I. OVERLAYS

Movings averages

Bollinger Bands

Keltner Channels

Parabolic SAR

II. INDICATORS

Accumulation/Distribution Line

Average Directional Index (ADX)

Average True Range (ATR)

Commodity Channel Index (CCI)

Chaikin Money Flow (CMF)

Moving Average Convergence/Divergence (MACD)

On Balance Volume (OBV)

Percentage Volume Oscillator (PVO)

Momentum (MOM) & Rate of Change

Stochastic Oscillator

Triple Exponential Average (TRIX)

Williams %R

III. PRICE PATTERNS

There are many types of patterns. Basic patterns are:

Symmetrical triangles

Ascending triangles

Descending triangles

Head and shoulders

Inverted head and shoulders

Wedges

Flags and pennants

Rectangles

    

Other types of price patterns include:

double top reversals

double bottom reversals

head & shoulders top (reversal)

falling wedges (reversal)

rising wedges (reversal)

rounding bottoms (reversal)

triple tops reversal

bump & runs (reversal)

flags, pennants (continuation)

rectangles (continuation)

measured moves bullish

measured moves bearish

cup with handles