Wednesday, May 8, 2013

Technical Analysis Continuation Pattern

  • Cup with Handle
  • Flags

To qualify a continuation pattern, a prior trend should exist. Ideally the trend should be a few months old and not too mature. The more mature the trend, the less change that the pattern makes a continuation or the less upside potential.

Cup: The cup should be 'U' shaped and resemble a bowl or rounding bottom a 'V' shaped bottom would be considered too sharp of a reversal to qualify.

Handle: After the high forms on the right side of the cup, there is a pullback that forms the handle sometimes this handle resembles a flag or pannant that slops downtrend, other times just a short pullback. the handle represents the final cups advance.

Flags: The flag and pennants formation are quite common. They are usually treated together because they are very similar in appearance, tend to show up at about the same place in an exciting trend, and have the same volume and criteria.

Sunday, May 5, 2013

Technical Analysis Charting Pattern " Head and Shoulder", "Inverted Head and Shoulder"

Charting Patterns:

  • Head & Shoulder
  • Inverted Head & Shoulder
Head & Shoulder consists of a peak followed by a higher peak and then a lower peak with a break below the neckline. The neckline is drawn through the lowest points of the two intervening troughs and may slop upward or downward. A downward sloping neckline is more reliable as a signal. The extent of the breakout move can be estimated by measuring from the top of the middle peak down to the neckline. This target is then projected downwards from the point of breakout.
Trading Signals:  Go short at breakout below neckline. place a stop-loss just above the last peak. After the breakout, price often rallies back to the neckline which then acts as a resistance level. Go short on a reversal signal and place a stop-loss on tick above the resistance level.

With Inverted Head & Shoulders the neckline is drawn through the highest points of the two inverting peaks. A downward sloping neckline signals continuing weakness and is less reliable as a reversal signal. The extent of the breakout move trough up to the neckline. This target is then projected upwards from the point of breakout.
Trading Signals:  Go long at the breakout above trend line. place a stop-loss one tick below the last trough. There is frequently a correction back to the neckline, which then acts as a support level. Go long on a reversal signal and place a stop-loss one tick below the support level.

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Sunday, April 28, 2013

Dos and Donts in Stock Market

You are here to make money not to lose your money

Points to remember:
  • Do not overtrade.
  • Do not trade on rumors.
  • Do not trade in all stocks of one sector.
  • It's better to buy the wrong stocks at the right time than to buy the right stocks at the wrong time.
  • Trade with the trends rather than trying to pick tops and bottoms.
  • As long as a market is acting right. don't rush to take profits.
  • Don't buy something because it is low priced.
  • Money cannot be made everyday from the markets.
  • Avoid making average when stock is coming down.
  • Don't watch or trade too many stocks at once.

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Friday, April 26, 2013

Support & Resistance in Stock Market

How Support & Resistance will help in Stock Market?

The price move in a series of perks and trough, and that the direction of those peaks and trough determined the trend of the market. Now give those peaks and trough their appropriate names as support and resistance.
           The trough, or reaction lows are called as support that indicate as a level or area on the chart under the market where buying interest is sufficiently strong to overcome selling pressure. Resistance is the opposite of support and represents a price level or area over the market where selling pressure overcomes buying pressure and a price advance is turned back.
           In a uptrend, the resistance levels represents pause in that uptrend and are usually exceeding at same point. In a downtrend support levels are not sufficient to stop the decline permanently but are able to check it at least temporarily. The concept of support and resistance is necessary for a full understanding of the concept of the trend.
           Each time a previous resistance peak is  being tested, the uptrend is in a especially critical phase, failure of exceed a previous peak in an uptrend, the ability of price to bounce off the previous support low in a downtrend..

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Wednesday, April 24, 2013

Technical Analysis & its benefits

Learn Technical Analysis & take control of your investments
The application of technical analysis in financial market helps to forecast the future price of a stock or a derivative instrument on the basis of historical data, current data price and volume.

  • It will guide you "when to buy & when to sell stocks or commodities" & make you confident for taking decisions in different market conditions.
  • To understand market behavior and get best results even in a volatile market.
  • Learn how to trade in both rising as well as falling markets.
  • It will help to know the right time to enter the market.
  • Works with proper exit strategy.
  • Can know in advance where the markets are more likely to go.
  • Can make a wise decision on "what to buy or what not to buy". 

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