Technical Analysis

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Prepared by: Mr. SOUR Ramo

Contain

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1. Introduction

2. Candle Chart

4. Pattern Analysis

3. Trend Analysis

1.Introduce

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1.1 What is Technical Analysis?

Technical analysis is a tool to estimate a proper security value

by focusing on the historical price and trading volume.

Technical analysis is often called “ Chart analysis”.

The underlying assumption is 1) the historical trend or pattern

will repeat in the future, 2) the share price and trading volume

graphs show the information on the supply and demand for

the stocks.

1.Introduce

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1.2 Technical Analysis’ strength and weakness

Strength

• Share price is affected by fundamental as well as psychological factors, and the technical analysis makes up the factors that fundamental analysis does not cover.

• Technical analysis provides the information on the entry/exit points.

Weakness

• When the stock price diverges from the historical trend, the technical analysis does not work.

• Technical analysis misses the cause of the stock price movement.

2.Candle Chart

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2.1 Introduction

2.Candle Chart

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2.2 Example

2.Candle Chart

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2.3 Bar Chart Comparing with candle chart, bar chart does not have body.

Instead, the opening (closing) price is shown as a tic to the left

(right) of the vertical bar.

2.Candle Chart

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2.3 Line Chart

Line chart produces a solid line by connecting the successive

closing prices. This does not show opening, high, and low prices.

2.Candle Chart

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2.4 Application

Long Body: Strong up

(down) trend, but

Continue?

Long Upper Shadow:

Change to Downturn

Long Lower Shadow:

Change to Upturn

2.Candle Chart

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2. 5 Simple Patterns ( here Green is bullish and red is bearish)

Big Red Candle

Doji

Dragonfly

Gravestone

Big Red Candle

2.Candle Chart

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2. 6 Complex Patterns ( here Green is bullish and red is bearish)

Bullish Harami

Bearish Haramiconsists

Bullish Engulfing

Bearish Engulfing

2.Candle Chart

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2. 6 Complex Patterns ( here Green is bullish and red is bearish)

Morning Star

Evening Star

Three Green bodies

Three Red bodies

2.Candle Chart

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2. 7 Some examples of the patterns above mentioned.

Engulfing Pattern

2.Candle Chart

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2. 7 Some examples of the patterns above mentioned. Morning (Evening) Star Pattern

3.Trend Analysis

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3.1 Introduction

The underlying assumption is that the historical trend will continue in the future.

Like other technical analysis, the success in the past does not always guarantee the success in the future.

3.Trend Analysis

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3.2 Support and Resistance

3.2.1 Support

3.Trend Analysis

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3.2 Support and Resistance

3.2.2 Resistance

3.Trend Analysis

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3.2 Support and Resistance

3.Trend Analysis

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3.3 Exercise

What do you think?

3.Trend Analysis

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3.3 Exercise(1)

What do you think?

3.Trend Analysis

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3.3 Exercise(2)

What do you think?

3.Trend Analysis

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3.3 Exercise(3)

What do you think?

3.Trend Analysis

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3.3 Exercise(4)

What do you think?

3.Trend Analysis

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3.3 Exercise(5)

What do you think?

3.Trend Analysis

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3.3 Exercise(6)

What do you think?

3.Trend Analysis

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3.3 Exercise(7)

What do you think?

3.Trend Analysis

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3.4 Moving Average

3.Trend Analysis

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3.5 Exercises What do you think?

3.Trend Analysis

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3.5 Exercises(1) What do you think?

A

B C

D

E

F

G

3.Trend Analysis

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3.5 Exercises(2) What do you think?

3.Trend Analysis

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3.5 Exercises(3) What do you think?

3.Trend Analysis

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3.5 Exercises(4) What do you think?

3.Trend Analysis

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3.5 Exercises(5) What do you think?

3.Trend Analysis

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3.5 Exercises(6) What do you think?

4.Pattern Analysis

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4.1 Introduction

Patterns are classified into two groups

1. Direction change:

1.1Three bodies

1.2 Head and shoulder

(tops/bottoms) formation

1.3 Rounding ( top/bottom)

formation

1.4 Double top (double bottom)

2. Continuation:

2.1 Flag formation

2.2 Rectangle formation

Others: triangle formation, wedge formation

4.Pattern Analysis

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4.2 Three Bodies

Three White Soldiers

Three Black Crows

4.Pattern Analysis

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4.3 Head and Shoulder Formation

Head and shoulder tops formation

4.Pattern Analysis

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4.3 Head and Shoulder Formation

Head and shoulder bottoms formation

4.Pattern Analysis

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4.4 Rounding Formation

Rounding Top Formation

4.Pattern Analysis

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4.4 Rounding Formation

Rounding Bottom Formation

4.Pattern Analysis

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4.5 Double Formation

Double Top Formation

4.Pattern Analysis

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4.5 Double Formation

Double Bottom Formation

4.Pattern Analysis

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4.6 Flag Formation

Bull flag formation

4.Pattern Analysis

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4.6 Flag Formation

Bear flag formation

4.Pattern Analysis

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4.7 Rectangle Formation

Rectangle formation usually takes 1~3 months to be formed.

After the share price rally

4.Pattern Analysis

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4.7 Rectangle Formation

Rectangle formation usually takes 1~3 months to be formed.

After the share price down

4.Pattern Analysis

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4.8 Triangle Formation

Symmetrical triangle formation

4.Pattern Analysis

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4.8 Triangle Formation

Ascending triangle formation

4.Pattern Analysis

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4.8 Triangle Formation

Descending triangle formation

4.Pattern Analysis

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4.9 Wedge Formation

Rising Wedge formation

4.Pattern Analysis

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4.9 Wedge Formation

Falling Wedge formation

4.Pattern Analysis

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4.10 Exercises

What do you see?

4.Pattern Analysis

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4.10 Exercises

What do you see?

4.Pattern Analysis

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4.10 Exercises

What do you see?

4.Pattern Analysis

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4.10 Exercises

What do you see?

4.Pattern Analysis

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4.10 Exercises

What do you see?

4.Pattern Analysis

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4.10 Exercises

What do you see?

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Thank You!!!