COL: A Primer Into Technical Analysis Part 1 & 2


Hello Friends!

First of all, last Thursday, September 25, 2014 was my birthday, do you wanna ask about my age? Well its simply getting younger as it gets and I can’t just believe it…hahaha. I also wanna say “THANK YOU VERY MUCH” to all who sent their wishes on my most special day of the year 2014, that made it more special knowing that few people still remember my birthday. Again from the bottom of my heart “THANK YOU VERY MUCH”.

During that same day I was one of the privileged individual to join the seminar on “A PRIMER INTO TECHNICAL ANALYSIS” conducted by Mr. Juanis Barredo, VP-Sales & Customer Support, Chief Technical Analyst of COL Financial Group Inc. Here is some of my picture of him during the seminar.

Juanis Barredo2
Picture 1: Mr. Juanis Barredo, VP-Sales & Customer Support, Chief Technical Analyst of COL Financial Group Inc.

Here are the Topic Outline:

  • What is Technical Analysis
  • Spotting and Following Trends
  • Understanding Corrections and & Area Patterns
  • Technical Indicators
  • Establishing the Trading Plan

PART 1:

WHAT IS TECHNICAL ANALYSIS?

Technical Analysis is the study of price movement of any type of security pictured into a graph or chart, for the purpose of spotting & following price trends.

graph
Sample Graph 1: The Stock Market Trend

THE STUDY OF PRICE

Price Discounts Everything

  • The market prices tells you everything you need to know about a stock market expectations.

Price Movement Trends

  • An object in motion tends to stay in motion; while an object at the rest tends to stay at rest

History Repeats Itself

  • People will tend to react in similar fashion to certain kinds of stimuli, grooming repetitive patterns of price activity.

LOOKING AT PRICES THRU GRAPHS

reading-stock-charts-bar-chart-pic
Sample Bar Charts

CandlestickBasicsChart

OPEN – the first price a stock trades at

HIGH – the highest price it reaches in a trading day

LOW – the lowest price is tags during a trading day

CLOSE – the final trading price of the day

LOOKING AT PRICES THRU GRAPHS

Picture2

Picture1

Advantage of looking at graphs/charts:

  • See and analyze information fast
  • Spot trend movements and changes
  • Scope out and study many possible instruments (indices, stocks bonds, commodities, currencies..)

STUDYING VOLUME WITH GRAPHS

Volume – measures the number shares or value of those shares that trade in a day

  • It can confirm your suspicions about a trends forcefulness
  • Volume usually expands along with a trends
  • It drowns away when trends are weak and falling

Picture3

PART 2: SPOTTING AND FOLLOWING TRENDS

SUPPORT AND RESISTANCE

Support is a price point underneath a market that shows heaviness in buying sufficient enough to prevent prices from falling down

Resistance is a price point above a market that shows heaviness in a selling sufficient enough to prevent prices from rising up

Picture4

IDENTIFYING TRENDS

Trends are durable swings in market conditions; they show the general direction of a securities’ price overtime

Picture5

TRENDLINES are guideines that follow a trend that connect several areas of support or resistance to project buying or selling action over time

Picture6

TRENDLINE PERIODS

State your time period:

Short Term: From 3-6 months

Medium Term: 6-9 months

Long Term: 9+ months

TRENDLINES IN ACTION

Picture8

Strategy:

  • Buy closer to pullbacks to support of an up trendline or a breach of a down trendline
  • Hold as long as your trendlines do not break
  • Sell when your up trendline breaks

Whoaaa!!!…I hope this will make sense to all that will be reading this post…OK, for the meantime I would like to pause for a break since my daughter is hurrying to go to a mall where she will play in the children zone since it is a weekend and we have this schedule reserved for us to bond together. I will be posting the parts 3 & 4 on this Technical Trading Analysis next weekend. But before I will end this let me share to you this quote:

do it nowHAVE A BLESSED WEEKEND EVERYONE!!!

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