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Technical Tutorial En

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Zurich/Switzerland Global Technical Research and Behavioral Finance

Technical Analysis - Explained
Private Banking

Patterns
(Elliott waves)

Momentum
(Rates-of-change)

(Moving averages)

Trend

Greed Euphoria Denial Conviction Confidence Optimism Hope Relief Pessimism Fear Despondency Panic

Caution

Important disclosures are found in the Disclosure appendix Credit S uisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For a discussion of the risks of investing in the securities mentioned in this report, please refer to the following Internet link: https://research.credit-suisse.com/riskdisclosure

Technical Analysis - Explained

Contents
What is technical analysis? . . . . . . . . . . . . . . . . . . . . . . . . . 3 Technical analysis pre-empts fundamental data . . . . . . . 4 Mood governs ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Optimism, pessimism, greed and fear . . . . . . . . . . . . . . . 6 Chart types and chart construction . . . . . . . . . . . . . . . . . . 7 Support and resistance . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Trendlines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . 9 Investment horizons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 What trend? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Moving averages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 The simple moving average . . . . . . . . . . . . . . . . . . . . . . 13 Long-, medium- and short-term averages . . . . . . . . . . . 14 Moving average crossover . . . . . . . . . . . . . . . . . . . . . . . . 15 Momentum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Momentum, indicator signals . . . . . . . . . . . . . . . . . . . . . 17 Long-, medium- and short-term indicators . . . . . . . . . . . 18 9500 Trend and momentum combination . . . . . . . . . . . . . . . . 19 Reversal and redistribution . . . . . . . . . .9000 . . . . . . . . . . . . . . 20 Equity analysis . . . . . . . . . . . . . . . . . . . 8500 . . . . . . . . . . . . . . 21 Cycle phase distribution . . . . . . . . . . . . . . . . . . . . . . . . . 22 The Elliott Wave Principle . . . . . . . . . . .8000 ............ 23 Catalog of impulsive waves . . . . . . . . . . . . . . . . . . . . . . 24 Catalog of corrective patterns . . . . . . .7500 . . . . . . . . . . . . . 25 Impulsive wave patterns, example. . . . . . . . . . . . . . . . . 26 7000 Corrective wave patterns, example . . . . . . . . . . . . . . . . 27 Head and shoulder reversal pattern . . .6500 . . . . . . . . . . . . . 28 Fascinating Fibonacci . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Wave correlations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 6000 Fibonacci correlation - more than coincidence . . . . . . 31 Diploma in basic technical analysis . . . . . . . . . . . . . . . 32

Global Technical Research

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Technical Analysis - Explained

Price chart
6500 6000

5500

Technical indicators

5000

2000 1500 1000 500 0 -500 -1000 May Jun Jul Aug Sep Oct Nov Dec 2010 Feb Mar Apr

What is technical analysis?
Technical analysis is the study of financial market action. The technician looks at price changes that occur on a day-to-day or week-to-week basis or over any other constant time period displayed in graphic form, called charts. Hence the name chart analysis. A chartist analyzes price charts only, while the technical analyst studies technical indicators derived from price changes in addition to the price charts. Technical analysts examine the price action of the financial markets instead of the fundamental factors that (seem to) effect market prices. Technicians believe that even if all relevant information of a particular market or stock was available, you still could not predict a precise market "response" to that information. There are so many factors interacting at any one time that it is easy for important ones to be ignored in favor of those that are considered as the "flavor of the day." The technical analyst believes that all the relevant market information is reflected (or discounted) in the price with the exception of shocking news such as natural distasters or acts of God. These factors, however, are discounted very quickly. Watching financial markets, it becomes obvious that there are trends, momentum and patterns that repeat over time, not exactly the same way but similar. Charts are self-similar as they show the same fractal structure (a fractal is a tiny pattern; self-similar means the overall pattern is made up of smaller versions of the same pattern) whether in stocks, commodities, currencies, bonds. A chart is a mirror of the mood of the crowd and not of the fundamental factors. Thus, technical analysis is the analysis of human mass psychology. Therefore, it is also called behavioral finance.

Global Technical Research

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while there is no cause for such an uptrend. It is non-existent on a medium. and not providing fundamental reasons to sell. this is not only true for the stock market and the economy. if the fundamental news is positive the price should rise. Most often. the contrary is true. Moreover. i. In fact. prices start falling in a new bear trend while the economy is still growing (position A).e. but also for the price trends of individual equities and company earnings.and long-term basis. The stock market itself is the best predictor of the future fundamental trend. The purpose of technical analysis is to identify trend changes that precede the fundamental trend and do not (yet) make sense if compared to the concurrent fundamental trend. Vice versa. and if the news is negative the price should fall. This means. long-term analyses of price changes in financial markets around the world show that such a correlation is present only in the short-term horizon and only to a limited extent. prices start rising in a new bull trend while the economy is still in recession (position B on chart shown above).Technical Analysis . However. There is a time-lag of several months by which the fundamental trend follows the stock market trend. Global Technical Research -4- .Explained A Economic recession Stock market Economic recession Economic growth B B Technical analysis pre-empts fundamental data Fundamentalists believe there is a cause and effect between fundamental factors and price changes. Stock prices peak ahead of peak earnings while bottoming ahead of peak losses.

Investors who manage to act opposite to the mood of the crowd and against their own emotions are best positioned to earn money in the financial markets. They were. The human element. that those who recognize the symptoms and the trend changes on the charts can profit very well from this knowledge. Reason is replaced by emotion and rationalization with such cyclical regularity. Financial risk and emotional risk correlate inversely. Falling prices that at first appear to be bargains generate fear of loss at much lower prices when opportunities are the greatest. which encompasses a range of emotions from fear to greed. Global Technical Research -5- . for the most part. Ego and emotions determine far more of investors´ stock market decisions than most would be willing to admit. most investors act exactly opposite to the rational wisdom of buying low and selling high based on very predictable emotional responses to rising or falling prices.Explained G R E E D F E A R Mood governs ratio Know yourself and knowledge of the stock market will soon follow.Technical Analysis . better informed. For years. Rising prices that at first appear to be good opportunities to sell ultimately lead to greedinduced buying at much higher levels. plays a much bigger role in the decision-making process than most investors realize. we have dealt with professional money managers and committees and found they were as much subject to crowd following and other irrational emotional mistakes as any novice investor. In a practical sense. but facts alone are not enough to make profitable decisions.

Euphoria) Conviction Confidence Price trend Complacency Caution Concern Capitulation (Pessimism. Investors must learn to buy when they are fearful (pessimistic) and sell when they feel euphoric (optimstic). Fear. but without Technical Analysis it is hard to achieve.Technical Analysis . Greed.Explained (Optimism. Investors remain under the bullish impression of the recent uptrend beyond the forming price top and during a large part of the bear trend. people are motivated by greed (optimism) when buying and by fear (pessimism) when selling. This may sound easy (simple contrary opinion). which is after a large part of the bull trend is already over. They formulate fundamental scenarios based on their emotional state (a rationalization of the emotions). pessimism. People are motivated to buy and sell by changes in emotion from optimism to pessimism and vice versa. which prevents them from realizing that the main drive is emotion. Global Technical Research -6- . as we have seen. The main purpose of technical analysis is to help investors identify turning points which they cannot see because of individual and group psychological factors. The same occurs in an uptrend when mood shifts from pessimism to optimism. Likewise. if investors act on concern or capitulation (pessimism) they SELL near or at the BOTTOM. greed and fear Why aren´t more people making more money in the financial markets? Because. The chart above shows that if investors buy based on confidence or conviction (optimism) they BUY near or at the TOP. Emotions are the drawback of fundamental analysis. Panic) Optimism. investors formulate bearish scenarios. Investors formulate bullish scenarios AFTER having turned bullish. they remain pessimistic under the bearish impression from the past downtrend through the market bottom and during a large part of the next bull trend. Once having turned bearish. Vice versa. They adjust their bullish fundamental scenarios to bearish AFTER having become pessimistic under the pressure of the downtrend or AFTER having become optimistic under the pressure of the uptrend. looking for more weakness just when it is about time to buy again.

especially for Open-high-low-close charts Elliott wave analysis. A line chart is the simplest of One single bar shows the high and the low of the all methods. Daily closing line chart High High 6500 Open 6000 Close 5500 Low Low May Jun Jul Aug Sep Oct Nov Dec 2010 Global Technical Research -7- . For example. The bar charts are: Line charts High-low charts or High-low-close charts or Sometimes we use line charts. It is constructed by joining together respective trading period.Explained Monthly OHLC bar chart 10000 9500 9000 8500 8000 7500 7000 6500 6000 5500 5000 Weekly OHLC bar chart 8000 7500 7000 6500 6000 5500 5000 4500 4000 3500 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 6850 6800 6750 6700 6650 6600 6550 6500 6450 6400 6350 6300 6250 6200 6150 6100 November December 2010 February March April February 8 15 22 1 March 4500 A M J A S O N D 2009 A M J J A S O N D 2010 A M J J A 6850 6800 6750 6700 6650 6600 6550 6500 6450 6400 6350 6300 6250 6200 Daily OHLC bar chart Hourly OHLC bar chart Bar charts the end of the period. A vertical bar is used to the closing price of each period. weekly closings used to show the opening price (left) of that spe. on the monthly chart.Technical Analysis .for the weekly chart or monthly closings for the cific trading period and the closing price (right) at monthy line chart. chart types. Horizontal lines are closings for the daily line chart. They are the most widely used month. a bar indicates the high and the Four bar charts of the Swiss Market Index are low at which the SMI traded during that single shown above. for example daily connect the high and the low.

5 or 22. The price started to correct from there and Microsoft remained below this level until February 1998. Notice that the previous support often becomes resistance and resistance becomes support. An uptrend continues as long as the most recent peak is surpassed and new peak levels are reached.Explained Break of resistance Last peak becomes resistance 35 Last peak becomes resistance Last peak becomes resistance Resistance becomes support Breakout above resistance level 30 30 25 19 Support becomes resistance Last low becomes support Last low becomes support Last low becomes support 1996 1997 1998 20 15 10 Break of support 5 Support and resistance Resistance lines are horizontal lines that start at a recent extreme price peak with the line pointing horizontally into the future. meaning that only if 19 (the highest peak so far in the uptrend) had been broken on the upside would the stock have confirmed its uptrend. 15.Technical Analysis . The downtrend remains intact as long as the price falls below the recent lows (support levels) and fails to rise above past resistance levels. 20. sustaining a series of lower lows and lower highs. The same is true for the bear trend. A bullish trend reversal occurs when the price penetrates the most recent resistance after holding above the most recent support. A bearish trend reversal occurs when the price breaks through the most recent support after failing to rise above the most recent resistance. Some examples for Microsoft are shown on the chart above. or lows for support) that can be connected by a single line increases. A resistance or a support line becomes more important and breaks above or below these lines gain more credibility as the number of price extremes (peaks for resistance. Support levels are positioned for example at 11. As long as the price pushes above past peaks (resistance levels) and holds above past support levels (does not break them) the uptrend remains intact. The 19 level became the resistance. Microsoft reached a high of 19 in July 1997. A downtrend continues as long as past lows are broken. The same is true for the peak at 30 in July 1998. Global Technical Research -8- . Support lines are horizontal lines that start at a recent extreme of a correction low and also point toward the future on the time axis. The uptrend was confirmed when the price rose above this resistance in November 1998.

e. meaning the trend is only seen as broken if the price closes over 1% above/below the trendline. The important point is that it should not be drawn over the price action. Trendlines must encorporate all of the price data. For a downtrend the peaks are connected. connect the highs in a downtrend and the lows in an uptrend. avoiding the urge to sell too soon because the profit could be higher than you originally thought. Global Technical Research -9- . The trendline becomes more important and gains credibility as the number of price extremes that can be connected by a single line increases. The chart above shows Intel´s rise from July 1996 to March 1997. Some analysts use a 2-day rule.Technical Analysis . i. The validity and viability of a line that connects only two price extremes (for example the starting point and one price low) is questionable. The trendline is nothing more than a straight line drawn between at least three points.Explained 21 20 19 Trendline is broken 18 17 16 15 14 13 Trendline is broken 12 11 10 9 8 J J A S O N D 1997 M A Trendlines Resistance levels can either be drawn by horizontal lines (as discussed on the previous page) or can be uptrending or downtrending lines. meaning that the trend is only seen as broken if the price closes above/below the trendline for at least two days. investors would have held onto the position from around 38/40 until 66 or even 74/76. Based on the uptrend line. The trend is broken when the price falls below the uptrend line or rises above the downtrend line. Most often investors take profits much too early. In an upmove the low points are connected to form an uptrend line. Stay with a trend until it breaks. Others use a 1% stop (could be higher depending on market volatility).

10 - .Technical Analysis . The best investment results are achieved when all three trends on the daily. We can compare the charts and indicators to a clock (shown above). some want to know the seconds and some want to know the exact time. long-term can mean several days. If somebody tells you to buy the US dollar because it is likely to rise. For a trader. several weeks or several months. the long-term horizon is entirely different from that of an institutional investor. Medium-term trends (the minutes) are best seen on weekly bar charts and long-term trends (the hours) are best seen on monthly bar charts. a medium-term and a long-term trend. Some investors only want to know the hour.Explained 11 10 9 SECONDS Short-term trend (lasts about 2-6 weeks) 12 1 2 3 HOURS Long-term trend (lasts about 12 months) 8 7 6 5 4 MINUTES Intermediate-term trend (lasts about 3-6 months) Investment horizons The charts on the previous pages show that investors require perspective. it can mean 12 to 18 months. For a technician on the trading floor. Global Technical Research . weekly and monthly charts point in the same direction. make sure you understand whether the dollar is expected to rise over a few days or a few months and if you should buy the dollar with the intention to hold it for several days. while for the investor. Short-term trends (the seconds) are best analyzed on daily bar charts. It is imperative to differentiate between a short-term.

10 1994 1995 1996 1997 1998 What trend? Uptrend: Higher peaks and higher troughs Downtrend: Lower peaks and lower troughs The chart above shows three US dollar/Swiss franc trends. but is interrupted by corrections of a smaller degree. They are also called MINOR trends (the Seconds). They are also called SECONDARY trends. Technical analysis helps you to differentiate between the various trends in all financial markets and instruments.40 1. Sometimes it is difficult to differentiate between a short. 3) These smaller trends are the short-term trends. A minor downtrend can be part of an intermediate-term uptrend.and a medium-term or a long-term trend.50 1.55 1.Explained Long-term trends 1) Medium-term trends 1.25 3) 1.11 - Sideways trend or consolidation: Horizontal peaks and troughs Global Technical Research .45 1.20 1. It is also called the PRIMARY trend (the Hours). The long-term uptrend is not a straight line. The mediumterm correction is also not a straight line.30 1. 1) The uptrend from 1995 to 1997 is long term. . 2) These corrections are the medium-term or intermediate-term trends (the Minutes). It was broken by the 1998 decline.Technical Analysis . which itself can be part of a longer-term primary downtrend. but is made up of smaller corrections.35 2) 1.15 Short-term trends 1.

we use the 34-day and 55-day averages.8 41 41.4 34.6 38. Moreover.12 - Time . you simply add the closing prices of the last five closings and divide this sum by 5. you add 10 days or 40 weeks and divide the sum by 10 or 40.Days .6 37. 377-day.2 30.6 44 51 55 59 65 69 Moving averages Moving averages are popular and versatile for identifing price trends. instead of adding five days.2 32. For the medium-term trend. we use the 13-day and 21-day averages. For a 5-day moving average. 610-day and 987-day moving averages. we use the moving average length out of the Fibonacci series (see page 29). The simple moving average is the most widely used. we also analyze very long-term trends. Price & 5-day moving average Price and 5-day moving average Price 80 70 60 50 40 30 20 10 0 1 4 7 10 13 16 19 22 25 28 31 34 37 40 Price 5-day-moving average Whether you choose a 10-day average or a 40week average.6 64. the so-called secular trends with the 233-day.4 61. Global Technical Research . we use the 89-day and 144day averages. You add each new closing and skip the oldest. thereby making it easier to determine underlying trends. the calculation is the same. respectively.6 32 31 30. They smooth out fluctuations in market prices. Thus.8 30 33 33.6 Day Close 5-day Total 5-day Average 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 48 40 43 41 35 39 35 37 25 18 35 50 40 45 50 70 70 60 75 70 171 186 199 205 207 198 193 187 171 154 150 165 168 188 220 255 275 295 325 345 34.Explained Day Close 5-day Total 5-day Average 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 50 55 57 60 65 70 66 60 50 54 45 43 33 40 35 30 25 30 35 33 x x x x 287 307 318 321 311 300 275 252 225 215 196 181 163 160 155 153 x x x x 57.2 39. Its calculation is shown above in mathematical form and displayed in the chart on the right.2 62.4 63.4 39. Their other function is to signal significant changes in direction as early as possible.Technical Analysis .6 37. In most of our research.2 37. To analyse the short-term trend.2 60 55 50. the sum of closings always remains constant at 5 days.2 36. For the long-term trend.4 45 43 39.

It is added confirmation when the moving average line turns in the direction of the price trend.day simple moving average (SMA) would include the last 21 days of data divided by 21. and the extent by which it lags (or its sensitivity) is a function of the time span.Explained 9500 9000 8500 5-day moving average 8000 21-day moving average 7500 27 3 10 August 17 24 31 8 14 September 21 28 5 12 October 19 26 2 9 November 16 23 30 7 14 December 21 28 4 11 1999 The simple moving average (SMA) The simple moving average yields the mean of a data set for a given period. a longer time period would be used. the shorter time frame will catch the minor moves more easily. The moving average naturally lags behind price movement. The moving average is usually plotted on the same chart as price movements. Generally a buy signal is generated when a price breaks above the moving average and a sell signal is generated by a price break below the moving average. This can be calculated at any given time using the last 21 days. the more sensitive it is. Generally. Global Technical Research . so a change in direction of trend can be indicated by the penetration/crossover of the SMA. hence. For example: a 21. which gives signals later and suffers from opportunity loss. the 5-day moving average is more likely to give false signals and "whipsaw" than the 21-day one. A 5-day moving average will react more quickly to a change in price than the 21-day moving average. resulting in an average (see chart above for the Dow Industrial Index). for example. if the market is trending (in an uptrend or downtrend).13 - . the shorter the moving average. If it is ranging (consolidating). However. similar to the support and resistance discussed on pages 8 and 9.Technical Analysis . Generally. the average moves forward with each trading day. Moving averages can act as support and resistance (as shown by the arrows on the chart above for the Dow Jones Industrial Index).

They are shown on the three charts on this page. The long-term moving average is not shown on the monthly chart. February April May June July Global Technical Research .Explained Swiss Market Index Monthly chart The 13-month and 21-month moving averages show the long-term trend 9500 9000 8500 8000 7500 7000 6500 6000 Swiss Market Index Weekly chart The 13-week and 21-week moving averages show the medium-term trend 6500 6000 5500 5000 4500 5500 5000 4500 4000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 4000 3500 2003 2004 2002 Long-term. the 13-week and 21week moving averages track the medium-term trend. This is shown on the next page.Technical Analysis . On the monthly chart above. we more often display all moving averages on a single daily chart. On the daily chart to the right. Swiss Market Index Daily chart 5600 5500 5400 5300 5200 5100 5000 4900 4800 4700 4600 The 13-day and 21-day moving averages show the short-term trend 4500 4400 4300 4200 Instead of showing the moving averages on three separate charts to illustrate the three basic trends. medium-term and short-term averages We incorporate two basic moving averages to track the three investment horizons as discussed on page 10.14 - . On the weekly chart above. the 13-month and 21-month moving averages track the long-term trend. The direction of the moving averages indicates the direction of the three basic trends in force. The medium-term moving average is also shown on the daily chart instead of the weekly chart. the 13-day and 21day moving averages track the short-term trend. but on the daily chart.

the 55-day moving average for the medium-term trend and the 144-day moving average for the long-term trend. The 21-day moving average is shown here for the short-term trend.24 1.when the moving averages cross each other A short-term (trading) buy signal (B1) is given when the price rises above the 21-day moving average. medium-term and long-term moving averages are all shown here on the daily chart. BUY and SELL signals are given . Displaying the three moving averages on one single chart provides important signals based on the moving average trends and crossovers.32 55-day moving average 1.54 S1 S2 S2 S3 1. A long-term (strategic) buy signal (B3) is given when the price rises above the 144-day moving average.52 1.42 1. It is confirmed when the 55-day average crosses above the 144-day moving average and the 144-day average itself starts rising. It is confirmed when the 21-day average crosses above the 55-day average and the 55-day average itself starts rising.16 Sep Moving average crossover The short-term.28 1. A medium-term (tactical) sell signal (S2) is given in the opposite direction.34 1. Global Technical Research .15 - .36 1. A short-term (trading) sell signal (S1) is given in the opposite direction.20 1.44 B1 B2 1. The buy signal is confirmed when the 21-day average itself starts rising. A long-term (strategic) sell signal (S3) is given in the opposite direction.22 B1 B3 B2 Oct Nov Dec 1997 Feb Mar Apr May Jun Jul Aug Sep Oct Nov 1. 1.26 144-day moving average 1.Technical Analysis .when the price crosses the moving average .18 1.40 1.when the moving average itself changes direction and .Explained S1 21-day moving average The best performance is achieved when the shortterm average is rising above the medium-term average and both are rising above the long-term moving average. A medium-term (tactical) buy signal (B2) is given when the price breaks above the 55-day moving average.38 1.50 1.48 1.30 1.46 1.

the indicator rises.e. the indicator is positive.Days crossover. below the zero line. Global Technical Research .Technical Analysis . rather than the actual price level itself. The moving averages are always displayed on the same chart and with the same scale as the price from which they are calculated. Therefore. i. The rate of change oscillator is rather volatile. They give signals before the price trend 10 Momentum 5-day rate-of-change (LEFT SCALE) turns. it is shown by the scale to the left. momentum indicators lead the price -20 trend. If the price today is lower than five days ago the indicator is negative.e.Explained Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 C lo s e 50 55 57 60 65 70 66 60 50 54 45 43 33 40 35 30 25 30 35 33 D iffe re n c e fro m 5 d a y s e a r lie r Day 21 22 23 24 25 C lo s e 48 40 43 41 35 39 35 37 25 18 35 50 40 45 50 70 70 60 75 70 D if f e re n c e f ro m 5 d a y s e a rlie r 18 15 13 6 2 -9 -5 -6 -1 6 -1 7 -4 15 3 20 32 35 20 20 30 20 20 11 3 -1 0 -1 1 -2 5 -2 3 -2 7 -1 0 -1 9 -1 5 -1 8 -3 -5 -2 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 Momentum Price and 5-day rate difference Price and 5-day of change In physics. This is why the momentum indicators are displayed with a different scale than the price scale. momentum is measured by the rate 80 80 of increase and decrease in the speed of an Price (RIGHT SCALE) 70 object. above the zero line. here we calculate the difference over a constant 5-day period for a 5-day rate of change. But once momentum provides a signal it -40 indicator Zero line 0 has to be confirmed by a moving average 1 4 7 10 13 16 19 22 25 28 31 34 37 40 Time . 20 40 While moving averages are lagging indicators. On the chart above.16 - Momentum Price . 30 0 giving signals after the price trend has already 20 turned. i. If the price continues to rise compared to five days earlier. In financial markets it is measured by 60 60 the speed of the price trend. If today´s price is higher than five days ago. whether a 40 50 trend is accelerating or decelerating. The momentum indicators are calculated using the price difference rather than adding the prices (as with the moving averages). we have smoothed it out (see blue line) so that it provides easy-to-read directional change signals as explained on the next page.e. This is shown on the chart above together with the zero line. Instead of calculating the moving average of the sum of 5 days (see page 12). i.

i. A real-time example is shown on the next page for IBM on the weekly chart.and short-term momentum. Sell short! 6) The indicator is declining through the "d"own phase towards the zero line. Expect the downtrend to bottom out soon. the price downtrend accelerates. the price uptrend accelerates. It is shifting from the "u"p phase to the "a"dvancing phase. It is the length of the time axis that differentiates the three time horizons. Expect the downtrend to continue. Add to shorts! 7) The indicator crosses below the zero line. Expect a price uptrend to start. Advancing quadrant (a): Oscillator above the zero line and rising. Expect a new price downtrend to start. Add to longs! 3) The indicator crosses above the zero line.e.Explained a+d=top phase 5 4 u+a= bull phase 6 positive 3 Zero Line values 7 0 negative values 2 d+t= bear phase 8 1 1 Time axis t+u=bottom phase Momentum indicator signals The principle of momentum applies exactly the same to driving a car as to price movements. Terminating quadrant (t): Oscillator below the Zero Line and declining. the indicator is becoming neutral: Expect the uptrend to continue.17 - . the price downtrend decelerates.e reversing upwards at an oversold level. Down quadrant (d): Oscillator above the Zero line and declining. medium. An uptrend reversal is unlikely. Expect the uptrend to enter the top soon. weekly or daily charts to identify the long-. When prices fall and the indicator rises. Buy! 2) The indicator is rising through the "u"p phase towards the zero line.Technical Analysis . The indicator is shown above in an idealized form (bell curve). the price uptrend decelerates. When prices rise and the momentum indicator also rises. When prices fall and the momentum indicator falls. Liquidate longs. Expect the downtrend to continue: Hold short! 8) The oscillator falls through the "t"erminating phase to the oversold level. Therefore. Global Technical Research . Expect the uptrend to continue: Hold! 4)The oscillator rises through the "a"dvancing phase towards the overbought level. Get ready to buy! Buy when a reversal from "t" to "u" occurs. The momentum oscillator can be in one of four quadrants: Up quadrant (u): Oscillator below the zero line and rising. When prices rise and the indicator falls. The same oscillator applies on monthly. Get ready to sell! 5) The indicator is shifting from the "a"dvancing phase to the "d"own phase. It is shifting from the "d"own phase to the "t"erminating phase. i. momentum indicators have to be applied together with the moving averages. The indicator is reversing downwards at an overbought level. 1) The indicator is shifting from the "t"erminating phase to the "u"p phase.

medium-term and short-term indicators Swiss Market Index daily chart   We incorporate three momentum indicators to track the three investment horizons as discussed on page 10. and support and resistance should be applied. Likewise. The monthly or long-term momentum indicator tracks the long-term trend. a combination of the signals given by the momentum oscillators. me4700 dium-term or intermediate-term momentum in4600 4500  dicator (roughly a 10-week rate of change) tracks  4400 the medium-term trend while the daily or short4300 term momentum indicator (roughly a 10-day rate 4200 Short-term momentum oscillator of change) tracks the short-term trend. Thus. 1000 We then combine the momentum indicators with 500 the moving averages to identify the trends in force 0 and to assess the most likely future path of these Lower highs in the momentum -500 trends. moving averages. roughly 4800 a 10-month rate-of-change).18 - . means the uptrend is slowing. 2003 2004 -1500 -2000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Long-term. 5600 5500 5400 5300 5200 5100 5000 4900 Global Technical Research . The weekly.Technical Analysis . -1000 The highest investment return is achieved when investors start buying at the momentum bottom February March April May June July and add to positions when the price confirms the momentum indicator´s uptrend and rises above the moving average.Explained Swiss Market Index monthly chart   Swiss Market Index  weekly chart 6500   9500 9000 8500 8000 7500 7000 6500 6000 5500 5000   6000 5500 5000 4500  Long-term momentum oscillator 4500 4000 3500 4000 3000 2000 1000 0 -1000 -2000 -3000    Medium-term momentum oscillator 4000 3500 1000 500 0 -500 -1000 Higher lows in the momentum means the downtrend is slowing. investors should start selling if the momentum indicator tops out and sell more if the price falls below the moving average.

Technical Analysis . we pictured the three moving averages on one single chart which was the daily chart.30 1.54 in August. the 55-day average with the weekly (medium-term) indicator and the 144-day average with the monthly (long-term) momentum indicator. AT THE SAME TIME.35 144-day (long-term) moving average Monthly (long-term) indicator Weekly (medium-term) indicator Daily (short-term) indicator 1. which in turn is rising above the 144-day moving average. The long-term top was also indicated by the negative divergence (dashed blue line) in the medium-term momentum indicator.40 1. Thus it did not confirm the new price high in the US dollar at CHF 1.49. We do the same analysis here with the momentum indicators.55 1. The same is true in the opposite direction for the most negative constellation.19 - . The medium-term top in March was also indicated by the negative divergence of the daily momentum indicator. which registered a lower high in September compared to its high in March. weekly and monthly momentum indicators are rising. the long-term trend was rising from 1996 until August 1997. which did not confirm the new high in the US dollar in February 1997 at 1.50 1. The US dollar was trading above the rising 144-day average and the long-term momentum indicator was rising until it topped in September. The most positive technical constellation is present when the price is above the short-term average. On the chart above for the US dollar/Swiss franc. medium. The medium-term trend was bullish from September 1996 until March 1997 when the weekly indicator topped and the US dollar fell below the slowing 55-day average. The momentum indicator´s top was soon confirmed by the dollar´s fall below the 144-day average in September and October. The daily indicator registered a top that was lower than the top in January.25 1. Global Technical Research . The 21-day average is monitored in combination with the daily (shortterm) momentum indicator.45 1.20 2000 1500 1000 500 Sep Oct Nov Dec 1997 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Trend and momentum combination On page 15.and long-term moving averages.Explained 21-day (short-term) moving average 55-day (medium-term) moving average 1. which in turn is rising above the medium-term average. THE COMBINATION OF THESE SIX INDICATORS reveals the most likely future path of the underlying market in all asset classes. We show all three momentum indicators on the daily chart together with the short-term. the daily.

more often than not. Sometimes. Most of the time. These signals are called redistribution examples (see scheme on the right and chart above) or re-accumulation. allowing the major underlying trend forces to rebase at the adjusted price level. the more Zero line the prices need energy to sustain the trend. fully retraced. Very high-risk t Sometimes signals leave room for interpretation (techspeculative buy nical analyis is an art not a science). The stock is said to be OVERBOUGHT when the momentum oscillator reaches an extreme upper level Initial True curve sell signal above the zero line and OVERSOLD when it reaches an Secondary extreme lower level below the zero line. Most of the time the ensuing price rallies are short-lived and are. Signals are given when the trend reverses an extreme levRedistribution example els. i. The pause and delay in the aberrated trend is often psychologically quite unnerving for the investor. The oscillator sell signal acts like a rubber band: the further it stretches. This is seen as a high-risk buying opportunity. a trend reversal should be expected the more stretched the moa d a d mentum indicator becomes. The indicator does signal not always cross the zero line before giving a new buyMomentum indicator or sell signal. Therefore.20 - . patience becomes a tactical requirement. This is seen as a high-risk selling opportunity. The same pattern can occur in the opposite direction when the indicator turns downward again from a low level below the zero line (still oversold) instead of topping above the zero line (overbought level). more often than not.Technical Analysis . fully retraced. the ensuing declines are short-lived and are.Explained IBM (weekly chart) 21-week moving average 13-week moving average 55 50 45 40 35 30 Medium-term momentum indicator 25 20 Redistribution OVERBOUGHT SELL 15 4000 3000 2000 a d Re-accumulation 1995 1996 t u a d OVERSOLD 1997 1000 t u BUY 0 -1000 Reversal and redistribution IBM is shown above together with the medium-term momentum indicator on the weekly chart. the oscillator turns upwards again from a high level above the zero line instead of bottoming below the zero line.e. Global Technical Research .

115 1500 1000 500 0 Halliburton (weekly chart) Medium-term momentum indicator above Zero and declining. 65 60 55 50 45 Entergy (weekly chart) Zimmer Holding (weekly chart) Medium-term momentum indicator below Zero and rising. medium.21 - . Investors should look to buy stocks with a rising momentum indicator while selling the stocks with a falling momentum indicator. 2010 2010 2011 Global Technical Research . each displaying the medium-term indicator in one of the 4 possible positions. Four stocks are shown on this page. 40 2500 2000 1500 1000 500 0 -500 -1000 2011 85 84 83 82 81 80 79 78 77 76 75 74 73 72 71 70 1500 1000 500 0 -500 Medium-term momentum indicator below Zero and declining.and long-term momentum model.Explained IBM (weekly chart) 145 140 135 130 125 120 35 30 25 Medium-term momentum indicator above Zero and rising.Technical Analysis . 3000 2000 1000 0 -1000 2010 2011 2010 2011 Portfolio analysis Each day we calculate the position of over 1000 stocks on the short-.

We use percentages so that we can compare different portfolios and markets with different stocks and different asset classes. Thus.Explained % C Y C L E P H A S E D IS T R IB U T IO N N u m b e r o f F ile s = 1 0 0 % 30 Up A d v a n c in g D e c lin in g T e r m in a t in g Long C y c le 0 30 30 40 I n t e r m e d ia t e C y c le 17 53 23 7 S h o rt C y c le 50 13 7 30 Cycle phase distribution On the previous page. 80 stock market indices. Global Technical Research . Only the short-term cycle pointed to strength (u+a=63%). For each stock. You need to build trust in these indicators so that you can buy against the prevailing pessimism and sell against the prevailing optimism. we pictured 4 stocks and their 53% 23% weekly momentum indicators. The distribution shows Intermediate-term momentum cycle 5 stocks (17%) with a momentum indicator rising below the zero line (up). Swiss franc and British pound each against 40 currencies.Technical Analysis .22 - . we can calculate the number of stocks positioned in each cycle quadrant. we calculated the position of the long-term. the 30 stocks were quite advanced in their intermediate-term uptrend (a+d=76%. From this data. On the right. medium-term and short-term momentum indicators. If we take 30 stocks instead of only 4 and calculate the medium-term indicator for each of the 30 stocks. 40 commodities. The same percentage distribution is shown above for the long-term indicators and the short-term indicators. bond-futures and 40 interest rate series. as of this point in time. Moreover. Also. for the US dollar against 40 currencies and the same for the Japanese yen. we can see that. 16 stocks (53%) with a momentum indicator rising above the zero line (advancing). the entire portfolio of 30 stocks equals 100%. we highlight the dis7% tribution of the medium-term indicators from the table above. The example above shows the 30 stocks in the Dow 17% Jones Industrial Index. 2 stocks (7%) with a momentum indicator falling below the zero line (terminating). 7 stocks (23%) with a momentum indicator falling above the zero line (down). We do this type of momentum analysis for over 1000 stocks. the longterm analysis shows that most stocks were in the bearish phase (d+t=70%). We search for those financial market series that are best positioned in bull phases. euro. The indicators provide a clear outlook and objectivity for the broad market trends. allowing you to buy and sell against the backdrop of subjective emotional stress. see page 17 for cycle phases).

And finally. creating specific patterns in price movements. and letters to designate "3-wave" patterns. confirmed 50 years later in collaboration with Henry Houthakker. which antedates today’ s formal study of non-linear dynamics and chaos. It constantly moves from pessimism to optimism. a final set of 5 waves materializes and completes the whole pattern. there is now a set of 3 waves (a). Numbers are used to designate "5-wave" patterns. The basic pattern shows that markets move forward in a series of 5 waves of psychological development (from pessimism to optimism). or once a month.Explained and Waves Waves Waves The Elliott Wave Principle The Wave Principle was Ralph Nelson Elliott’ s discovery of how social or crowd behaviour trends and reverses in recognizable patterns. a reaction sets in. or even once a year. Elliott isolated thirteen patterns. Elliott discovered what the main initiator of the chaos theory. The main point emerging from the Elliott Wave concept is that markets have form (pattern). an economics professor at Harvard: that patterns made by taking very short-term "snapshots" of stock prices. Global Technical Research . taking place in 3 waves (from optimism to pessimism). was proposed by Elliott in the 1930s. after wave (5) is complete. This concept of recursive patterns across finer and finer scales in the financial markets (their fractal nature). The crowd is not a physical crowd but a psychological crowd. Benoit Mandelbrot. which themselves had each broken into 5 and 3 smaller waves along the way. When these 5 forward waves are complete. and where they are likely to occur in the overall path of the market development. He cataloged them and explained that they link together. from fear to greed and from euphoria to panic and back in a natural psychological sequence. for example every day are similar to patterns formed by snapshots taken once a week.Technical Analysis .23 - . to be followed by another set of 5 waves. after two sets of 5 waves (1) and (3) and two sets of three wave patterns (2) and (4). At this point. It is here that the investor finds determinism in a seemingly random process. The description reveals that there is a PSYCHE OF THE CROWD inherent in all representative financial market series. It is a detailed description of how financial markets behave. This set would correct the whole of the 5 upward waves. These 8 waves then complete a cycle from which a new series of 5 waves commences. (b) and (c) of greater magnitude than the two previous corrections.

Explained Catalog of impulsive waves Impulsive patterns in bull markets 5 3 5 1 4 3 2 4 1 i iii v Impulsive patterns in bear markets Basic 2 1 2 4 iv ii 3 1 4 ii 5 Fifth wave wedge 3 iv i 2 3 i iii iv ii 5 v iii 5 2 v 1 4 Fifth wave failure 1 4 ii i iii 2 5 3 (5) (3) 5 3 2 iv v 2 (2) 3 5 1 4 (4) 4 (1) 1 Third wave extension 1 4 (4) 3 5 4 1 (1) 2 (2) 2 (3) (5) 3 5 Global Technical Research .24 - .Technical Analysis .

25 - .Explained Catalog of corrective patterns Corrective patterns in bull markets Corrective patterns in bear markets C A B C X B C Double ZigZag A B B C Regular Flat (3-3-5) A C X C A B A B C Simple ZigZag (5-3-5) B B A B C A C A A B A C A C A C Irregular Flat (3-3-5) B C A A B C B B A C A C B B B A D C E E C A Triangle (3-3-3-3-3) B D Global Technical Research .Technical Analysis .

We said in December that the longterm uptrend was not complete yet. Ultimately. 5 C September 2 October November December 1999 Global Technical Research .and 3wave patterns. The price reached 36 in wave and was immediately followed by a sharp correction. The chart is taken from our real-time recommendation. Given a series of 5. and that at least one more upleg (wave 5) should be expected. It is the knowledge of these patterns that allows the investor to recognize when a trend change will occur before it has occured.Technical Analysis . The chart on the right is updated to show the 5-wave pattern that was completed from the low in August at Wave correlation suggested that the minimum price target was around 35.26 - .Explained 5 30 3 4 25 20 1 5 3 1 2 Oct Nov Dec 15 B A 10 2 C 5 4 Mar Apr May Jun Jul Aug Jan 1998 Feb Sep Oct Nov Dec Impulsive wave patterns If you have followed the argument thus far. the implications begin to appear. 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 5 3 4 1 7. the price completed another five-wave pattern at 440. An example of a five-wave pattern is shown above for Yahoo. the investor should be able to predict the continuation of the next 5-3 pattern until a larger wave pattern is completed.

Explained B D B E A C A C D E Corrective wave patterns Page 25 shows the corrective patterns which can appear in financial markets. Each market pattern has a name and specific form determined by a small number of rules and guidelines. Yet.Technical Analysis . Corrective patterns can become very complex and difficult to interpret. Soon after wave E was completed the stock broke out on the upside and reinstated its larger uptrend. It is this "self-similarity" which makes up the difference between deterministic chaos and random-walk. Global Technical Research . a specific pattern is never identical to another pattern of the same type.27 - . Some triangles are ascending. However. Together with the Zigzags and Flats they make up the list of corrective patterns. The patterns are variable enough in some aspects to allow for limited diversity within patterns of the same type. some are descending and some are expanding. It is shown on the hourly chart of ATT between 27 October and late November between 65 and 60. its form provides important information on the most likely path of the next impulsive wave. The triangle example above is one of a few thousand that we have seen developing. once a correction is completed. The chart above displays one of the most widely recognized patterns: the horizontal triangle. What sets the wave principle apart and ahead of other technical approaches is primarily this characteristic of design and form.

and now all that remains is the break of the "neckline" drawn under the two reaction lows "4" and "A". with no evidence of a top formation. Fibonacci correlations allow for a more precise method to analyze the wave correlation. levels off and then establishes a downtrend.80% of the decline from "5" to "A". each swing high must exceed the high preceding it. Applying Elliott Wave analysis together with momentum analysis provides a much earlier sell signal which is when the five-wave uptrend tops and the correction starts to display impulsive patterns on the downside. This basic head and shoulder has one negative aspect: investors have to wait for a break of the neckline to sell. the uptrend is powerful. To re-establish the primary uptrend. The measured target of the break is the height of the "head" above the neckline (wave 5 to wave A). The fall in prices to "A" is breaking the uptrend. retracement and wave length as shown on the next page. Additionally the uptrend line by this stage has been broken on decline "5" to "A". Volume tends to pick up as higher highs are made. At "3" on the graph above left. descending peaks). The INVERSE head and shoulder formation works exactly the same only in the opposite direction.e. Global Technical Research . The failure of "B" to regain the high at "5" fulfills half the requirement for a trend reversal (i.Technical Analysis . considered a correction within the broader uptrend.Explained Head 5 Left Shoulder 3 4 Neckline Right Shoulder H H S S S S Neckline B (2) A (1) (4) (3) Target Neckline of inverse head & shoulder S S (5) C H Head and shoulder reversal pattern The H&S is the best known of all chart reversal patterns and is formed when an uptrend loses momentum. such a break may occur rather late if the head occurs at a highly overbought level. projected down from the neckline break. falling towards the previous reaction low at "4". The dip to "4" on lighter volume is. A closing break below the neckline on increased volume activates this pattern. The rally to "5" on diminishing volume alerts the technician that a top may be close at hand. The market then rallies to "B" which is generally 50% to 61. However. The neckline can be upward sloping or downward sloping or may be horizontal. at this stage.28 - . Moreover.

.618 x 0.618 or 0. 233.618 2.. the constellations. 13.. architecture AND THE FINANCIAL MARKETS have one thing in common: the FIBONACCI SEQUENCE. 233. Leonardo Fibonacci was a thirteenth century mathematician who developed a number sequence of the form: 1..Explained 1.. It is known as the Golden Ratio or Golden Mean (or phi) and governs nature´s growth patterns. 8/5. 89.. 3/5. 8. Global Technical Research .618 = 2/3.618 to 1 and to the next lower number is 1. 610. flowers. There are numerous relationships within this series. 55. 21.. These numbers have some special relationship of their own such as 2. 1597. 34.618 . 144.. 89. 5.. 21. but the most important is 1..... This sequence of numbers has some very important properties.618 or its inverse 0... 5/8. 8. 3.618 x 0. 13/8..618 x 1....0.618. 2..Technical Analysis .. .1.618 Any length can be divided so the ratio between the smaller part and the larger part is equivalent to the ratio between the larger part and the whole. 34. 3) The sum of all Fibonacci numbers in the sequence +1 equals the Fibonacci number two steps ahead. 987 . Fascinating Fibonacci It may surprise you to learn that the universe.29 - .618 = 0. 3.... 2. 55.618 = 1 0. 377. 1. natural science. 144. AB/BC=BC/AC=0.382.382 1.618 = 0.382 1 .. 4) The square of a Fibonacci number minus the square of the second number below it in the sequence is always a Fibonacci number. 13. 5... where each number is the sum of the previous two numbers. . man.382 = 1 Additional phenomena relating to the Fibonacci sequence includes: 1) No two consecutive numbers in the sequence have any common factors. The ratio is always 0.618 = 2. the galaxy. plant life. oceans.. 2) The sum of any ten numbers in the sequence is divisible by 11.. 8/13. 1+1=2 2+1=3 3+2=5 5+3=8 8+5=13 13+8=21 21+13=34 34+21=55 55+34=89 89+55=144 144+89=233 233+144=377 377+233=610 etc.. 5/3. Between alternate numbers in the sequence the ratio is 2. 377.... For example: The ratio of any number to the next number in the sequence is 0.618.. A B C 0. music.618.... 987..618 = 3/2. 2584.. 610.

0 or 1.Explained Waves 1 & 2 Waves 1 & 3 Waves 3 & 4 0.0 1.0 Triangle waves 1.618 1.0 Waves A & B & C in corrections 0.0 or 1.618 1.618 1.0 1.382 1.382 1.618 0.618 or 2.30 - .0 0.0 Waves 1 to 3 & 5 1.382 or 0.618 Wave correlations The most important wave correlations in bull markets (impulse waves) and bear markets (corrective waves) are shown on this page.382 or 0. Global Technical Research .Technical Analysis .618 or 0.618 0.618 0.0 1.

snail shells.more than coincidence A man´s body. Moreover.80% retracement on a long-term basis. The decline from July 1998 had retraced exactly 61. The fundamental news and trends are mostly triggered by mass mood psychology. This is because the markets are not only numbers or economic factors but most importantly reflect human nature: crowd emotions in motion. This is known as the golden spiral.618. spiral galaxies of outer space or the human DNA spiral. Global Technical Research . It takes time to learn it.31 - . The wave pattern and the Fibonacci relations are the language of the financial markets. The charts above show examples of a 61. we arrive at 34 waves (see page 23). Elliott was probably the first to associate Fibonacci with technical analysis and when he wrote "Nature´s Law" referred specificially to the Fibonacci sequence as the mathematical basis for the wave principle: a bull market sub-divides into 5 legs. wave 1 traced out five subwaves from 4Q 1994 to 1Q 1996. The correction traced out a perfect a-b-c pattern. but in the end you will understand what the markets are indicating and that it is the mood of the crowd which shapes the fundamental world and not vice versa.Explained 61. The ratio 0. if you divide the body at the navel . If the subwaves are counted. Wave c was equal in length to wave a and the entire ab-c correction retraced 61.80% of the previous bull trend from 1995 to 1998 at 55.618.80% of the previous five-wave structure. Spirals on shells when examined more closely are shown to have arcs whose lengths are ratios of their diameters that equate to 1. sunflowers. and a bear market into 3 legs which makes a total of 8.618 to 1 is the mathematical basis for the Parthonon.382 Fibonacci correlations . Financial markets have the same mathematical basis as natural laws. We could show you hundreds of such examples.Technical Analysis .80% retracement of the entire bull cycle from 1995 to 1998 0. within the long-term uptrend.80% retracement of the entire bull cycle from 1995 to 1998 5 3 4 2 B 1 A C 0.from the navel to the top of the head is about a 0.618 ratio of the lower part of the body (from the navel to the feet). The Greeks based much of their art and architecture on this proportion.618 61. and the larger radius is related to the smaller radius by 1.

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The “ Com men t” column in clude s the latest advice f ro m t he analyst .com/legal/pb_research/additional_files/tech_disclosure. C S b eliev es the info rmat io n and opinions in the Disclosur e A ppend ix of th is repo rt are a ccu rate and com plete. T he inf ormation. All m ater ial presente d in this r epor t. the Sw iss b ank. CSS B do es not g uar antee t he per fo rm ance of . In for mation. T rad e ideas may also diff er dir ectionally fr om inv estm ent rating s. the se ctor or the market that may hav e a mat erial impa ct on the r esearc h v iews or o pin ion s state d herein .com/research/disclaimer https://w ww.com/who_we_are/en/ http://ww w.pdf https://w ww. o r w ill be dir ectly or indire ctly r elated to t he specific re co mm endation (s) or view (s) in this r epor t. au thor ized and re gulated b y the C ent ral Ban k of B ahr ain (C BB ) as an In vest ment Firm Ca tego ry 2 . C S accepts no liabilit y fo r lo ss arising fro m the u se of t he mat erial present ed in this r epo rt.c om/le gal/pb_res ea rch/a dditiona l_file s/te c h_ dis closure . In addition.pdf https://w ww. B ahrain B ranch. the S wiss bank. to ols and m ater ial p resen ted in this re port ar e p rov ide d to y ou for inf orm ation purp oses only and ar e n ot to b e used or consid ered as an offer or the solicitat io n of an off er to sell or to buy or subscribe for secur ities o r ot her financial instr ume nts. with out th e pr io r ex press w r itten permission of CS.credit-suisse. and is dist ribute d on behalf of C re dit S uisse AG . “ M T” denot es t he ra ting fo r th e m edium -ter m tr end (3 – 6 mo nth outlook) . Nassau B ranch. “ C lose ”is the la test clo sing p rice q uote d on the e xcha nge. v iew s and analyt ical met hods o f t he analy st s who p rep ared them and CS is unde r no oblig ation t o ensur e t hat such o ther re ports are b rou ght to the att ent ion of any recipie nt of th is r epor t. Im portant discl os ures Credit Suisse policy is to publish re se arch re port s. the o bserv ations and view s o f the C red it Suisse Resear ch dep artm ent of Invest ment B anking division du e t o the diff ere nces in evaluat ion cr ite ria. a S wiss b ank.c om/lega l/pb_res ea rch/in depen den ce_e n. “ P&L ”gives the profit or loss that has accr ued sin ce the pur chase r ecom mend ation w as g iv en. ple ase re fer to the info rmation on in depend ence of financial re se arch. C S may hav e issue d. Related financial p rod ucts or serv ice s a re o nly av ailable to w holesale custom ers w ith liq uid asse ts of o ver USD 1 m illion w ho hav e suf ficient finan cial exp erience and u nder standing to p articipate in financial mar ket s in a w holesale jurisdict ion and satisf y the regulato ry crit eria t o b e a client. includ ing disclosur es w it h r espect to any oth er issuers. nor any co py of it. pdf Th e analyst (s) respon sible f or pre paring this resear ch r epor t r eceived comp ensation th at is based up on var io us factor s including C red it Su isse ’ s tot al r eve nues. but C S m akes n o repr esenta tio ns as t o t heir accura cy or complet eness. Please n ote in par ticu lar that t he b ase s and lev els of tax ation m ay chang e. CS has not r eview ed the linked site and t akes no responsibility f or the con tent contained ther ein. w hile com pany recom me ndations re flect invest ment r ecom mend ations b ase d on e xpe cted to tal r etur n ove r a 6 to 1 2-m onth p eriod as d efined in the disclosure section. C redit Suisse ( Fr ance) is sup erv ised and r egulate d b y the Au torité de C ont rôle Pr udentie l and the Au tor it é des March és Financiers. This r epo rt may prov ide the add resses of . Credit Suisse Hong Kon g B ranch does no t hold an y disclosable inter ests.credit-suisse. B aha ma s: T his r eport w as p rep ared by Cr edit Suisse AG. Outp erf or m in the colu mn “ Rel per f” d enot es th e ex pect ed p erf ormance of the sto ck s re lat iv e to th e be nchma rk. a b ranch of the Sw iss bank. CS d oes not offer adv ice on the tax conseq uences of inv estmen t and y ou ar e adv ised to con tact an indep ende nt tax adviser. please use the following link: https://www. pu blication. The analy st s also cert if y that no par t of th eir com pensation was. Addition a l disc los ure s for the following juri sdictions Hon g Kong: Other than any int ere st s h eld by the an aly st and/or associat es as disclosed in t his r epor t. G uide to technical analy sis Whe re recom me ndation tables ar e me ntioned in the re por t. or inco nsisten t w ith. Kn owledg e P rocess Ou tsour cing ( KPO) An alysts m entione d in t his re port are em plo yed by Cr edit Suisse Business Analy tics (India) Pr iv ate Limited. “ ST ” deno tes t he shor t-t erm tr end (3 – 6 w eek o utlook). Un ited K ingdom: F or f ix ed incom e disclosure info rma tio n fo r client s o f C redit Su isse (U K) L imite d and C re dit Suisse Se cu rities (Eur ope) L im ite d. o ther r epor ts th at ar e inconsistent with . is accessible v ia the w ebsit e at : https://w ww. please r efe r t o t he follo wing Inter net link: https://research. copied or distribut ed to any o ther pa rty . av ailability or use wou ld be cont rar y to law or r egu lat ion or w hich wou ld subject Credit Suisse AG. opinions and estimat es contained in t his r epor t r eflect a judg ment at its o riginal dat e of p ublication b y C S a nd are sub ject t o chang e witho ut not ice. S ydn ey B ranch ( CSSB ) (ABN 1 7 0 61 700 71 2 AFSL 2 2 68 9 6) o nly to "Wholesale" clients as de fined by s7 6 1G o f the C orporat io ns Act 2 0 01 . C S is involv ed in many b usine sses t hat relate to compa nie s men tioned in this r eport. th is r epo rt is dist ribut ed b y Credit Suisse AG . B ahra in: This rep ort is d istr ib uted by Credit Suisse AG. F or more infor mat io n on our str uctur e.c redit-suisse . and o ther pr oprieta ry t rading . Cr edit Suisse po licy is only to p ublish inv estme nt resear ch t hat is impa rtial. Additional inf orm ation is av ailable upon r equest. and reach d if fer ent co nclusions fr om. Dubai: This inf orm ation is dist ributed by Credit Suisse AG Dubai B ranch. fair and not misle adin g. pdf G lobal disclaimer / important information F or a discu ssion o f t he risks o f inv estin g in t he secur itie s mentio ned in this re port. Accessing such w ebsite or f ollow ing su ch link throug h th is r eport or CS ’ s we bsite shall be at y our ow n risk. u nle ss specifically indicated o ther wise. T hose re ports r ef lect the diffe ren t assump tio ns. mar ket m aking . autho rized and r egu lat ed b y t he Bund esanstalt f uer F inanzdienst leistung sa ufsicht (B aFin) .33 - . is un der copyright to CS.c redit-suisse .pdf F or m or e de tail. e xcept that th is e xclusion of liability do es n ot apply to the extent t hat liability arises u nder specific stat utes or reg ula tio ns a pplicable t o C S. indep ende nt. Th e rat in gs are “ +” for a positive o utlook ( price likely to r ise) . is.com /who_ we _are /e n/ Global Technical Research . risk arbitr age . Non e of th e ma terial.c om/gove rn ance /doc/code_of_ conduc t_en . F or furthe r inform ation. This r epo rt is not d ir ected to. F ran ce : This r epor t is distr ibu ted by Credit Suisse (F ran ce ). r egister ed as a broker d eale r by the Sec urities C om mission of the Ba hamas. au thor ized and reg ulated by the Swiss Financial Mar ket Su perviso ry A utho rity . disse min ates resea rch to its clients tha t has F or t he h isto ry of any trad e ideas based on t echnical an aly sis ov er the prev io us 12 mo nths.c om/lega l/pb_res ea rch/tec hn ic al_tutoria l_e n. All t radem ark s.credit-suisse. o r co ntain h ype rlinks to. or inte nded for distribu tion to o r u se by . Ge rma ny: C red it S uisse ( Deutschland) AG . This re por t is not to be relied u pon in substitut ion fo r t he exe rcise of inde pende nt judg ment .pdf https://www.com/legal/pb_research/technical_tutorial_en.c reditsuiss e. p lease re fer to T echnical Analysis Explained at: https://www. w ebsites.credit-suisse.pdf Tr ade ideas b ase d o n t echnical analysis ar e shor t term tradin g opportu nit ies that m ay diff er from t he views of other C red it Su isse resear ch an aly sts. tr ading ideas m ay diff er f rom the compan y re co mme ndation s.com/riskdisclosure http://ww w. C S m ay hav e issued. n or its co nten t.credit-suisse. please v iew the d ocume nt at: https://www. ser vice m arks and lo gos used in this re port are tr adem arks o r ser vice marks or r egister ed trad emar ks or serv ice marks of C S or its af filiate s. based on dev elopme nts w it h th e subject co mpany . Info rmatio n and opinio ns presen ted in t he o ther sections of t he repo rt w ere obt ain ed o r d eriv ed f ro m sou rces C S b eliev es ar e r eliable. F or a shor t int rod uction to technical analysis. Tr ading id eas a re shor t ter m tr ading opp ortu nitie s based o n mar ket ev ents and cat aly sts. Such a ddre ss or hyp erlin k (including addr esses or hy per links to C S ’ s own w ebsit e m ater ia l) is prov id ed sole ly f or y our co nven ien ce a nd in formation and t he cont ent of the linke d site doe s n ot in a ny w ay f orm part of th is docum ent . any p erson or ent it y who is a citizen or re sident of o r located in any locality. A us tra lia: T his rep ort is distribut ed in Austr alia b y Cr edit Su isse AG. and may in the f utu re issu e. duly licensed and r egu lat ed by th e Dubai Financial Services Au thor ity ( DF SA) .credit-suisse.c re dit-suisse . Dis tribution of re searc h reports Except as o ther w ise sp ecif ie d he rein. nor makes any assu rances w it h respect to th e p erf ormance of any financial prod uct r efe rred her ein. a uthor iz ed by t he Aut orité de C ont rôle Pr uden tiel ( ACP ) as an inv estme nt serv ice p rov id er. please call +41 4 4 3 33 33 9 9. stat e. a s it d eems appr opr iat e. In the column “ Recom ” the dat e is list ed wh en the stock was recom men ded fo r pur chase (o pening p urchase).c om/res ea rch/discl aim er T he inf ormation and op inions e xpr essed in this r epo rt wer e p rod uced by the Global R ese arch de part men t of t he Pr iv ate B anking division a t Cr edit Suisse as of the dat e o f w ritin g and ar e sub ject to chang e witho ut notice.com/governance/doc/code_of_conduct_en. the in formatio n presen ted in this repor t. Th e Cr edit Suisse C ode of C ondu ct to w hich all e mploy ees ar e obliged to ad her e. Be ca use tr adin g ideas an d com pany r ecom mend ations r efle ct d if fe rent assum ptions and analyt ical met hods.credit-suisse. View s ex presse d in r espect of a p articular se curity in this rep ort ma y be dif fe rent f rom .com/legal/pb_research/independence_en. Th ese businesses include specialized trading .com /res ea rch/risk dis closure Ref er ences in t his rep ort to C red it Suisse inclu de sub sidiaries and affiliates.c re dit-suisse . clea r.pdf https://w ww. “ 0” for neu tral ( no big pr ice chang es expect ed) and “ – ” f or a negat iv e outlook (p rice likely to fall).c redit-suisse .

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Credit Suisse (Guernsey) Limited is wholly owned by Credit Su isse and is reg ulat ed b y t he Gue rnsey Financial S ervices Co mmission.com Technical Research Beat Grunder. Credit Suisse Securities (Europe ) Limite d and Credit Su isse (UK) Limite d.com Christian Sutter . J ersey Branch. JA PAN: NEITHER THIS REP OR T NOR ANY COP Y THER EOF MAY BE SENT. +41 44 333 2069 E-Mail: christian.Explained bee n prepare d by one of its affiliate s.L. witho ut the written permission o f Cre dit Suisse . Sources Charts in this report are from MetaStock from Equis International and from Datastream. Singapore Tel.

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