Technical Analysis
CHART
• LINE CHART
• BAR CHART
TA Assumptions
• Price always moving in the trend
Change in Trend
Resistance
The price which a stock
or market can be
traded, but not exceed,
for a certain period
Support
The price level which,
historically, a stock had
a difculty falling
Types of Trend Line
Major trends –6 months s/d 2 years
Intermediate Trends – 3 weeks s/d 6 months
Trend line
Bullish Candlestick
Engulfing: This pattern consists of two candles. The first day is a narrow range candle that closes down for the day. The sellers are still in control of the stock but because it is a narrow range candle and volatility is low, the sellers are not very aggressive. The second day is a wide range candle that “engulfs” the body of the first candle and closes near the top of the range. The buyers have overwhelmed the sellers (demand is greater than supply). Buyers are ready to take control of this stock!
Hammer: The stock opened, then at some point the sellers took control of the stock and pushed it lower. By the end of the day, the buyers won and had enough strength to close the stock at the top of the range. Hammers can develop after a cluster of stop loss orders are hit. That’s when professional traders come in to grab shares at a lower price.
Harami: When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On the first day you see a wide range candle that closes near the bottom of the range. The sellers are still in control of this stock. Then on the second day, there is only a narrow range candle that closes up for the day. Note: Do not confuse this pattern with the engulfing pattern. The candles are opposite!
Piercing: This is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near the bottom of the range. The sellers are in control. On the second day you see a wide range candle that has to close at least halfway into the prior candle. Those that shorted the stock on first day are now sitting at a loss on the rally that happens on the second day. This can set up a powerful reversal.
Bearish Candlestick
Engulfing: This pattern consists of two candles. The first day is a narrow range candle that closes down for the day. The buyer are still in control of the stock but because it is a narrow range candle and volatility is low, the sellers are not very aggressive. The second day is a wide range candle that “engulfs” the body of the first candle and closes near the top of the range. The sellers have overwhelmed the buyers (supply is greater than demand). Sellers are ready to take control of this stock!
Shooting Star: The stock opened, then at some point the buyers took control of the stock and pushed it higher. By the end of the day, the sellers won and had enough strength to close the stock at the low of the range..
Harami: When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. On the first day you see a wide range candle that closes near the top of the range. The buyers are still in control of this stock. Then on the second day, there is only a narrow range candle that closes down for the day.
Piercing: This is also a two-candle reversal pattern where on the first day you see a wide range candle that closes near the bottom of the range. The buyers are in control. On the second day you see a wide range candle that has to close at least halfway into the prior candle.
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PRICE PATTERN
Teknikal analysis tidak mempercayai harga bergerak secara acak,
namun bergerak dalam pola (pattern) tertentu, biasanya teknikal analisis mengelompokan pola ini sbb:
REVERSAL:
- HEAD AND SHOULDER vs INVERTED
- DOUBLE TOP vs DOUBLE BOTTOM
CONTINUATION:
- TRIANGLE: ASCENDING vs DESCENDING
- FLAG
Modern Technical Analysis
Bollinger Band
BB signals:
• If curve move above upper band line,
normally it should have correction to came back at upper band zone
Modern Technical Analysis
Indikator Stochastic Oscillator (Stochastic-S)
• Stochastic is a lagging indicator to show
oversold/overbought. • Bullish Confirmation
Relative Strength Index (RSI)
Relative strength index (RSI) is an oscillator that measure current price strength in relation to previous prices. RSI is a versatile tool, it can be used to;
•Generate BUY and SELL signal
•Show Overbought and Oversold condition •Confirm price movement
•Warn to potencial price reversals through divergence
RSI Buy signal
Buy when RSI crossing oversold line (30)
RSI Sell Signal
Sell when RSI crossing overbought line (70)
SELL
Momentum indicator is the basic application in technical analysis. Momentum indicator calculate the speed in changing price to actual price. To get the signal more clear, use 12 days period for momentum indicator. Momentum indicator do not give overbought and oversold area, but only give one indicator that is 100 line.
Momentum BUY signal
Buy when momentum line below 100 line, and crossing up signal line.
Momentum SELL signal
Sell when momentum signal is turning back and crossing down to 100 line again.
Note: Using 12 – days period
BUY
ADX Line shows the power from trend. If this line above the normal line (25), then there is an implication that the trend will confirmed . ADX Line usually used with DI lines. DI lines give confirmation if the positive line above negative line
Note: ADX usually use 14 days period. Bear in mind that increasing the number of periods will smooth the ADX line (making it less volatile), and display more significant readings. The readings, however, will present more of a lag .
Example: using 20 days ADX line will smooth the trend but the signal will lagging maybe if we use the smaller period the signal will be seen
: ADX Line
: Positive Directional Index : Negative Directional Index
MACD & MACD Histogram
BUY
BUY SELL
Moving Average Convergence/Divergence is the indicator that can give the
information for the changing in the trend. BUY signal is triggered when there is a crossing from below MACD line with Signal line . SELL signal is triggered when
MACD line cross Signal line from above.
MACD Histogram have the same movement MACD, but with the different picture. Please observe the blue circle, uptrend can be confirmed when MACD line do the crossing and MACD Histogram move above 0 line. Different with the red circle, when downtrend can be confirmed when with the crossing in MACD line and MACD histogram move below to 0 line.
Note :MACD indicator is the lagging indicator(lagging indicator).
Moving Average
Moving Average is 1 of the simple indicator that can be used for trader or investor in pointing BUY or Sell, and can be used for pointing support and resistance
There is two way using moving average, that is: 1. Single Moving Average
As seen in picture where we can use Moving Average (MA) 50 for indicate support and resistance, but can also indicate Buy and Sell
In using this indicator we do not follow the minor trend but we follow the major trend. We buy when candlestick cross over MA 50 or when the candle is above MA 50 and sell when the candlestick below MA 50
Note: when using moving average as support it depend from investor, whether short term or long term. for short term usually use 10 or 20 days.
In this chart we use 2 Moving Average (MA) that is MA 10 and MA 20, usually trade use for BUY and SELL. In this case we buy when MA 50 crossing above MA 20 line usually called Golden Cross and sell when MA 10 crossing below MA 20 line usually called Death Cross
This indicator usually used with stochastic to give the stronger indicator.
Williams %R
SELL SELL SELL
Developed by Larry Williams, Williams %R is a momentum indicator that works much like the Stochastic Oscillator. It is especially popular for measuring
overbought and oversold levels. The scale ranges from 0 to -100 with readings from 0 to -20 considered overbought, and readings from -80 to -100 considered oversold.
William %R, sometimes referred to as %R, shows the relationship of the close relative to the high-low range over a set period of time. The nearer the close is to the top of the range, the nearer to zero (higher) the indicator will be. The nearer the close is to the bottom of the range, the nearer to -100 (lower) the indicator will be. If the close equals the high of the high-low range, then the indicator will show 0 (the highest reading). If the close equals the low of the high-low range, then the result will be -100 (the lowest reading)
NOTE: the reading in HOTS system is reversed
Typically, Williams %R is calculated using 14 periods and can be used on
