This action might not be possible to undo. Are you sure you want to continue?
Technical Analysis - Explained
Greed Euphoria Denial Conviction Confidence Optimism Hope Relief Pessimism Fear Despondency Panic
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
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
Technical Analysis - Explained
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
Vice versa. prices start rising in a new bull trend while the economy is still in recession (position B on chart shown above). The stock market itself is the best predictor of the future fundamental trend. while there is no cause for such an uptrend. if the fundamental news is positive the price should rise. This means. this is not only true for the stock market and the economy. Global Technical Research -4- . the contrary is true.Technical Analysis .and long-term basis. and not providing fundamental reasons to sell. prices start falling in a new bear trend while the economy is still growing (position A). Moreover. However. Stock prices peak ahead of peak earnings while bottoming ahead of peak losses. 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. and if the news is negative the price should fall. In fact. but also for the price trends of individual equities and company earnings. Most often.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. It is non-existent on a medium. 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.e. There is a time-lag of several months by which the fundamental trend follows the stock market trend. i.
for the most part. but facts alone are not enough to make profitable decisions. plays a much bigger role in the decision-making process than most investors realize. 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. Rising prices that at first appear to be good opportunities to sell ultimately lead to greedinduced buying at much higher levels. better informed. Financial risk and emotional risk correlate inversely. 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.Explained G R E E D F E A R Mood governs ratio Know yourself and knowledge of the stock market will soon follow. 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. that those who recognize the symptoms and the trend changes on the charts can profit very well from this knowledge. Global Technical Research -5- . which encompasses a range of emotions from fear to greed. The human element.Technical Analysis . They were. Reason is replaced by emotion and rationalization with such cyclical regularity. In a practical sense. Falling prices that at first appear to be bargains generate fear of loss at much lower prices when opportunities are the greatest. For years.
if investors act on concern or capitulation (pessimism) they SELL near or at the BOTTOM. Panic) Optimism. 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. people are motivated by greed (optimism) when buying and by fear (pessimism) when selling. The chart above shows that if investors buy based on confidence or conviction (optimism) they BUY near or at the TOP. Fear. but without Technical Analysis it is hard to achieve. Vice versa.Explained (Optimism. 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. Emotions are the drawback of fundamental analysis. Investors remain under the bullish impression of the recent uptrend beyond the forming price top and during a large part of the bear trend. Investors must learn to buy when they are fearful (pessimistic) and sell when they feel euphoric (optimstic). Investors formulate bullish scenarios AFTER having turned bullish. which prevents them from realizing that the main drive is emotion. investors formulate bearish scenarios. Euphoria) Conviction Confidence Price trend Complacency Caution Concern Capitulation (Pessimism. pessimism. as we have seen. The same occurs in an uptrend when mood shifts from pessimism to optimism. Global Technical Research -6- . This may sound easy (simple contrary opinion). They formulate fundamental scenarios based on their emotional state (a rationalization of the emotions). greed and fear Why aren´t more people making more money in the financial markets? Because. Once having turned bearish. which is after a large part of the bull trend is already over. Greed. People are motivated to buy and sell by changes in emotion from optimism to pessimism and vice versa. The main purpose of technical analysis is to help investors identify turning points which they cannot see because of individual and group psychological factors.Technical Analysis . looking for more weakness just when it is about time to buy again. Likewise.
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. It is constructed by joining together respective trading period. weekly closings used to show the opening price (left) of that spe. A vertical bar is used to the closing price of each period. Horizontal lines are closings for the daily line chart.Technical Analysis . for example daily connect the high and the low. chart types.for the weekly chart or monthly closings for the cific trading period and the closing price (right) at monthy line chart. 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. especially for Open-high-low-close charts Elliott wave analysis. They are the most widely used month. on the monthly chart. 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. A line chart is the simplest of One single bar shows the high and the low of the all methods.
A downtrend continues as long as past lows are broken. The 19 level became the resistance.Technical Analysis . or lows for support) that can be connected by a single line increases. The downtrend remains intact as long as the price falls below the recent lows (support levels) and fails to rise above past resistance levels. The same is true for the peak at 30 in July 1998. sustaining a series of lower lows and lower highs.5 or 22. 15. Notice that the previous support often becomes resistance and resistance becomes support. 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. 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 uptrend was confirmed when the price rose above this resistance in November 1998. Support levels are positioned for example at 11. A bearish trend reversal occurs when the price breaks through the most recent support after failing to rise above the most recent resistance. The price started to correct from there and Microsoft remained below this level until February 1998. An uptrend continues as long as the most recent peak is surpassed and new peak levels are reached. Microsoft reached a high of 19 in July 1997. 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. 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. Some examples for Microsoft are shown on the chart above. 20.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. A bullish trend reversal occurs when the price penetrates the most recent resistance after holding above the most recent support. The same is true for the bear trend.
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.e. The trend is broken when the price falls below the uptrend line or rises above the downtrend line. For a downtrend the peaks are connected. meaning that the trend is only seen as broken if the price closes above/below the trendline for at least two days. 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. connect the highs in a downtrend and the lows in an uptrend. Most often investors take profits much too early. Trendlines must encorporate all of the price data. investors would have held onto the position from around 38/40 until 66 or even 74/76. Some analysts use a 2-day rule. The chart above shows Intel´s rise from July 1996 to March 1997.Technical Analysis . Stay with a trend until it breaks. In an upmove the low points are connected to form an uptrend line. i. avoiding the urge to sell too soon because the profit could be higher than you originally thought. Others use a 1% stop (could be higher depending on market volatility). Based on the uptrend line. 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. 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.
it can mean 12 to 18 months.Technical Analysis . weekly and monthly charts point in the same direction. some want to know the seconds and some want to know the exact time. We can compare the charts and indicators to a clock (shown above). a medium-term and a long-term trend. 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. Some investors only want to know the hour. For a technician on the trading floor. The best investment results are achieved when all three trends on the daily. Short-term trends (the seconds) are best analyzed on daily bar charts. long-term can mean several days. while for the investor.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.10 - . the long-term horizon is entirely different from that of an institutional investor. It is imperative to differentiate between a short-term. several weeks or several months. For a trader. Global Technical Research . 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. If somebody tells you to buy the US dollar because it is likely to rise.
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. They are also called SECONDARY trends. 1) The uptrend from 1995 to 1997 is long term. The long-term uptrend is not a straight line. Sometimes it is difficult to differentiate between a short. which itself can be part of a longer-term primary downtrend. but is interrupted by corrections of a smaller degree.50 1.55 1. 2) These corrections are the medium-term or intermediate-term trends (the Minutes).Explained Long-term trends 1) Medium-term trends 1.45 1. It was broken by the 1998 decline.15 Short-term trends 1. but is made up of smaller corrections. .25 3) 1. It is also called the PRIMARY trend (the Hours).30 1. Technical analysis helps you to differentiate between the various trends in all financial markets and instruments. They are also called MINOR trends (the Seconds). 3) These smaller trends are the short-term trends.20 1. The mediumterm correction is also not a straight line.40 1.35 2) 1. A minor downtrend can be part of an intermediate-term uptrend.11 - Sideways trend or consolidation: Horizontal peaks and troughs Global Technical Research .Technical Analysis .and a medium-term or a long-term trend.
2 36. Global Technical Research .8 30 33 33.8 41 41.2 60 55 50.4 39.Technical Analysis .4 63.2 30. Their other function is to signal significant changes in direction as early as possible. In most of our research. we also analyze very long-term trends.2 39.2 37. 610-day and 987-day moving averages.6 37.2 62. Its calculation is shown above in mathematical form and displayed in the chart on the right.4 45 43 39. we use the 34-day and 55-day averages. the calculation is the same. you add 10 days or 40 weeks and divide the sum by 10 or 40.4 61. respectively. we use the 13-day and 21-day averages. Thus. 377-day. You add each new closing and skip the oldest. For the medium-term trend. you simply add the closing prices of the last five closings and divide this sum by 5.6 64. the sum of closings always remains constant at 5 days. thereby making it easier to determine underlying trends. They smooth out fluctuations in market prices.6 38. For the long-term trend.6 37. The simple moving average is the most widely used.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. 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.4 34.6 32 31 30.12 - Time . we use the 89-day and 144day averages.Days . instead of adding five days. we use the moving average length out of the Fibonacci series (see page 29). Moreover. the so-called secular trends with the 233-day.2 32.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 57.6 44 51 55 59 65 69 Moving averages Moving averages are popular and versatile for identifing price trends. To analyse the short-term trend. For a 5-day moving average.
Moving averages can act as support and resistance (as shown by the arrows on the chart above for the Dow Jones Industrial Index). If it is ranging (consolidating). for example. the shorter time frame will catch the minor moves more easily. hence. the 5-day moving average is more likely to give false signals and "whipsaw" than the 21-day one. For example: a 21. The moving average naturally lags behind price movement.Technical Analysis . if the market is trending (in an uptrend or downtrend). A 5-day moving average will react more quickly to a change in price than the 21-day moving average. 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. 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. The moving average is usually plotted on the same chart as price movements. Global Technical Research . a longer time period would be used. It is added confirmation when the moving average line turns in the direction of the price trend. the more sensitive it is.13 - . Generally. resulting in an average (see chart above for the Dow Industrial Index). However. Generally.day simple moving average (SMA) would include the last 21 days of data divided by 21. the average moves forward with each trading day. similar to the support and resistance discussed on pages 8 and 9. the shorter the moving average. This can be calculated at any given time using the last 21 days. so a change in direction of trend can be indicated by the penetration/crossover of the SMA. which gives signals later and suffers from opportunity loss.
Technical Analysis . the 13-month and 21-month moving averages track the long-term trend. The long-term moving average is not shown on the monthly chart. but on the daily chart. The direction of the moving averages indicates the direction of the three basic trends in force. They are shown on the three charts on this page. the 13-day and 21day moving averages track the short-term trend. 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. February April May June July Global Technical Research .14 - . On the daily chart to the right. This is shown on the next page. On the monthly chart above. we more often display all moving averages on a single daily chart. On the weekly chart above.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. medium-term and short-term averages We incorporate two basic moving averages to track the three investment horizons as discussed on page 10. the 13-week and 21week moving averages track the medium-term trend. The medium-term moving average is also shown on the daily chart instead of the weekly chart.
1.15 - .50 1. A short-term (trading) sell signal (S1) is given in the opposite direction. It is confirmed when the 21-day average crosses above the 55-day average and the 55-day average itself starts rising. 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.20 1. The 21-day moving average is shown here for the short-term trend.when the price crosses the moving average .34 1.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.22 B1 B3 B2 Oct Nov Dec 1997 Feb Mar Apr May Jun Jul Aug Sep Oct Nov 1. A medium-term (tactical) sell signal (S2) is given in the opposite direction. A medium-term (tactical) buy signal (B2) is given when the price breaks above the 55-day moving average.44 B1 B2 1. medium-term and long-term moving averages are all shown here on the daily chart.40 1.46 1.28 1.48 1. Displaying the three moving averages on one single chart provides important signals based on the moving average trends and crossovers. BUY and SELL signals are given .24 1.26 144-day moving average 1.Technical Analysis .16 Sep Moving average crossover The short-term.42 1. Global Technical Research .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.38 1. It is confirmed when the 55-day average crosses above the 144-day moving average and the 144-day average itself starts rising.when the moving average itself changes direction and .36 1. A long-term (strategic) buy signal (B3) is given when the price rises above the 144-day moving average.30 1.32 55-day moving average 1. the 55-day moving average for the medium-term trend and the 144-day moving average for the long-term trend.54 S1 S2 S2 S3 1.18 1.52 1.
i. we have smoothed it out (see blue line) so that it provides easy-to-read directional change signals as explained on the next page.Days crossover.e. the indicator is positive. If the price continues to rise compared to five days earlier. 20 40 While moving averages are lagging indicators. momentum indicators lead the price -20 trend.Technical Analysis . above the zero line. 30 0 giving signals after the price trend has already 20 turned.e. The momentum indicators are calculated using the price difference rather than adding the prices (as with the moving averages). momentum is measured by the rate 80 80 of increase and decrease in the speed of an Price (RIGHT SCALE) 70 object. it is shown by the scale to the left. This is shown on the chart above together with the zero line. If today´s price is higher than five days ago. The rate of change oscillator is rather volatile. the indicator rises. Therefore.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. On the chart above. This is why the momentum indicators are displayed with a different scale than the price scale. The moving averages are always displayed on the same chart and with the same scale as the price from which they are calculated. 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 . They give signals before the price trend 10 Momentum 5-day rate-of-change (LEFT SCALE) turns. Global Technical Research . In financial markets it is measured by 60 60 the speed of the price trend. If the price today is lower than five days ago the indicator is negative. i. below the zero line. rather than the actual price level itself. Instead of calculating the moving average of the sum of 5 days (see page 12).16 - Momentum Price . here we calculate the difference over a constant 5-day period for a 5-day rate of change. whether a 40 50 trend is accelerating or decelerating. i.
17 - . The indicator is reversing downwards at an overbought level. When prices rise and the momentum indicator also rises. Expect the downtrend to bottom out soon. It is shifting from the "u"p phase to the "a"dvancing phase. the price uptrend decelerates. the price uptrend accelerates. Expect the downtrend to continue: Hold short! 8) The oscillator falls through the "t"erminating phase to the oversold level. Expect a new price downtrend to start. the indicator is becoming neutral: Expect the uptrend to continue. Terminating quadrant (t): Oscillator below the Zero Line and declining.e. When prices rise and the indicator falls. the price downtrend accelerates. Down quadrant (d): Oscillator above the Zero line and declining. weekly or daily charts to identify the long-. Expect a price uptrend to start. Get ready to buy! Buy when a reversal from "t" to "u" occurs. Get ready to sell! 5) The indicator is shifting from the "a"dvancing phase to the "d"own phase. i. Add to shorts! 7) The indicator crosses below the zero line. When prices fall and the indicator rises. Advancing quadrant (a): Oscillator above the zero line and rising.Technical Analysis . i. When prices fall and the momentum indicator falls. Expect the uptrend to continue: Hold! 4)The oscillator rises through the "a"dvancing phase towards the overbought level. A real-time example is shown on the next page for IBM on the weekly chart. the price downtrend decelerates. It is the length of the time axis that differentiates the three time horizons. Sell short! 6) The indicator is declining through the "d"own phase towards the zero line. momentum indicators have to be applied together with the moving averages. Add to longs! 3) The indicator crosses above the zero line.and short-term momentum. The indicator is shown above in an idealized form (bell curve). Therefore. medium. Buy! 2) The indicator is rising through the "u"p phase towards the zero line. Expect the downtrend to continue. Liquidate longs. Expect the uptrend to enter the top soon.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. It is shifting from the "d"own phase to the "t"erminating phase.e reversing upwards at an oversold level. The same oscillator applies on monthly. An uptrend reversal is unlikely. Global Technical Research . 1) The indicator is shifting from the "t"erminating phase to the "u"p phase. The momentum oscillator can be in one of four quadrants: Up quadrant (u): Oscillator below the zero line and rising.
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.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. 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. Thus. means the uptrend is slowing. Likewise. investors should start selling if the momentum indicator tops out and sell more if the price falls below the moving average.18 - . a combination of the signals given by the momentum oscillators. The weekly. roughly 4800 a 10-month rate-of-change). and support and resistance should be applied.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. moving averages. 2003 2004 -1500 -2000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Long-term. The monthly or long-term momentum indicator tracks the long-term trend. 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. 5600 5500 5400 5300 5200 5100 5000 4900 Global Technical Research .
19 - . We do the same analysis here with the momentum indicators. which did not confirm the new high in the US dollar in February 1997 at 1.Explained 21-day (short-term) moving average 55-day (medium-term) moving average 1.30 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. the long-term trend was rising from 1996 until August 1997.45 1. we pictured the three moving averages on one single chart which was the daily chart. We show all three momentum indicators on the daily chart together with the short-term.55 1. The most positive technical constellation is present when the price is above the short-term average. Global Technical Research . The momentum indicator´s top was soon confirmed by the dollar´s fall below the 144-day average in September and October. The long-term top was also indicated by the negative divergence (dashed blue line) in the medium-term momentum indicator. The 21-day average is monitored in combination with the daily (shortterm) momentum indicator. The same is true in the opposite direction for the most negative constellation. AT THE SAME TIME. which in turn is rising above the medium-term average.Technical Analysis . THE COMBINATION OF THESE SIX INDICATORS reveals the most likely future path of the underlying market in all asset classes.50 1.40 1.54 in August. 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 daily. The medium-term top in March was also indicated by the negative divergence of the daily momentum indicator.25 1. On the chart above for the US dollar/Swiss franc.35 144-day (long-term) moving average Monthly (long-term) indicator Weekly (medium-term) indicator Daily (short-term) indicator 1.49.and long-term moving averages. which registered a lower high in September compared to its high in March. weekly and monthly momentum indicators are rising. the 55-day average with the weekly (medium-term) indicator and the 144-day average with the monthly (long-term) momentum indicator. The US dollar was trading above the rising 144-day average and the long-term momentum indicator was rising until it topped in September. which in turn is rising above the 144-day moving average. medium. The daily indicator registered a top that was lower than the top in January. Thus it did not confirm the new price high in the US dollar at CHF 1.
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.e. 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. The indicator does signal not always cross the zero line before giving a new buyMomentum indicator or sell signal.Technical Analysis . allowing the major underlying trend forces to rebase at the adjusted price level.20 - . Very high-risk t Sometimes signals leave room for interpretation (techspeculative buy nical analyis is an art not a science). Signals are given when the trend reverses an extreme levRedistribution example els. These signals are called redistribution examples (see scheme on the right and chart above) or re-accumulation. fully retraced. the oscillator turns upwards again from a high level above the zero line instead of bottoming below the zero line. Global Technical Research . The pause and delay in the aberrated trend is often psychologically quite unnerving for the investor. more often than not. Most of the time the ensuing price rallies are short-lived and are. a trend reversal should be expected the more stretched the moa d a d mentum indicator becomes. i. the more Zero line the prices need energy to sustain the trend. Most of the time. 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. patience becomes a tactical requirement. This is seen as a high-risk buying opportunity. Therefore. Sometimes. The oscillator sell signal acts like a rubber band: the further it stretches. This is seen as a high-risk selling opportunity. fully retraced.
Investors should look to buy stocks with a rising momentum indicator while selling the stocks with a falling momentum indicator. 65 60 55 50 45 Entergy (weekly chart) Zimmer Holding (weekly chart) Medium-term momentum indicator below Zero and rising.and long-term momentum model.Technical Analysis . 2010 2010 2011 Global Technical Research . medium. 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. each displaying the medium-term indicator in one of the 4 possible positions. 3000 2000 1000 0 -1000 2010 2011 2010 2011 Portfolio analysis Each day we calculate the position of over 1000 stocks on the short-.21 - .Explained IBM (weekly chart) 145 140 135 130 125 120 35 30 25 Medium-term momentum indicator above Zero and rising. Four stocks are shown on this page. 115 1500 1000 500 0 Halliburton (weekly chart) Medium-term momentum indicator above Zero and declining.
From this data. 7 stocks (23%) with a momentum indicator falling above the zero line (down). Thus. On the right. 2 stocks (7%) with a momentum indicator falling below the zero line (terminating).Technical Analysis . medium-term and short-term momentum indicators.22 - . allowing you to buy and sell against the backdrop of subjective emotional stress. we can see that. the entire portfolio of 30 stocks equals 100%.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. We do this type of momentum analysis for over 1000 stocks. We use percentages so that we can compare different portfolios and markets with different stocks and different asset classes. If we take 30 stocks instead of only 4 and calculate the medium-term indicator for each of the 30 stocks. 16 stocks (53%) with a momentum indicator rising above the zero line (advancing). Moreover. 80 stock market indices. Global Technical Research . for the US dollar against 40 currencies and the same for the Japanese yen. The example above shows the 30 stocks in the Dow 17% Jones Industrial Index. bond-futures and 40 interest rate series. For each stock. 40 commodities. we calculated the position of the long-term. the longterm analysis shows that most stocks were in the bearish phase (d+t=70%). The distribution shows Intermediate-term momentum cycle 5 stocks (17%) with a momentum indicator rising below the zero line (up). as of this point in time. You need to build trust in these indicators so that you can buy against the prevailing pessimism and sell against the prevailing optimism. Only the short-term cycle pointed to strength (u+a=63%). Also. we can calculate the number of stocks positioned in each cycle quadrant. The indicators provide a clear outlook and objectivity for the broad market trends. The same percentage distribution is shown above for the long-term indicators and the short-term indicators. we pictured 4 stocks and their 53% 23% weekly momentum indicators. the 30 stocks were quite advanced in their intermediate-term uptrend (a+d=76%. Swiss franc and British pound each against 40 currencies. We search for those financial market series that are best positioned in bull phases. euro. we highlight the dis7% tribution of the medium-term indicators from the table above. see page 17 for cycle phases).
At this point. and where they are likely to occur in the overall path of the market development. taking place in 3 waves (from optimism to pessimism). Numbers are used to designate "5-wave" patterns. or once a month. which themselves had each broken into 5 and 3 smaller waves along the way. for example every day are similar to patterns formed by snapshots taken once a week. The description reveals that there is a PSYCHE OF THE CROWD inherent in all representative financial market series. after two sets of 5 waves (1) and (3) and two sets of three wave patterns (2) and (4). which antedates today’ s formal study of non-linear dynamics and chaos. there is now a set of 3 waves (a). When these 5 forward waves are complete. It is a detailed description of how financial markets behave. The main point emerging from the Elliott Wave concept is that markets have form (pattern). after wave (5) is complete. Global Technical Research . Benoit Mandelbrot.Technical Analysis . This set would correct the whole of the 5 upward waves. Elliott isolated thirteen patterns. and letters to designate "3-wave" patterns. a reaction sets in. from fear to greed and from euphoria to panic and back in a natural psychological sequence. an economics professor at Harvard: that patterns made by taking very short-term "snapshots" of stock prices. Elliott discovered what the main initiator of the chaos theory. to be followed by another set of 5 waves. a final set of 5 waves materializes and completes the whole pattern. And finally. (b) and (c) of greater magnitude than the two previous corrections. It constantly moves from pessimism to optimism. This concept of recursive patterns across finer and finer scales in the financial markets (their fractal nature). was proposed by Elliott in the 1930s. or even once a year.23 - . The crowd is not a physical crowd but a psychological crowd. He cataloged them and explained that they link together.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. It is here that the investor finds determinism in a seemingly random process. These 8 waves then complete a cycle from which a new series of 5 waves commences. The basic pattern shows that markets move forward in a series of 5 waves of psychological development (from pessimism to optimism). creating specific patterns in price movements. confirmed 50 years later in collaboration with Henry Houthakker.
24 - .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 .Technical Analysis .
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 .25 - .Technical Analysis .
An example of a five-wave pattern is shown above for Yahoo.26 - . the implications begin to appear. The chart is taken from our real-time recommendation. the price completed another five-wave pattern at 440. It is the knowledge of these patterns that allows the investor to recognize when a trend change will occur before it has occured. We said in December that the longterm uptrend was not complete yet. 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. The price reached 36 in wave and was immediately followed by a sharp correction.Technical Analysis .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. 5 C September 2 October November December 1999 Global Technical Research . and that at least one more upleg (wave 5) should be expected. Ultimately.and 3wave patterns. Given a series of 5. the investor should be able to predict the continuation of the next 5-3 pattern until a larger wave pattern is completed. 38 36 34 32 30 28 26 24 22 20 18 16 14 12 10 8 6 5 3 4 1 7.
Each market pattern has a name and specific form determined by a small number of rules and guidelines. Yet. The chart above displays one of the most widely recognized patterns: the horizontal triangle. Together with the Zigzags and Flats they make up the list of corrective patterns. Corrective patterns can become very complex and difficult to interpret. some are descending and some are expanding. The patterns are variable enough in some aspects to allow for limited diversity within patterns of the same type. The triangle example above is one of a few thousand that we have seen developing.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. It is shown on the hourly chart of ATT between 27 October and late November between 65 and 60. It is this "self-similarity" which makes up the difference between deterministic chaos and random-walk. its form provides important information on the most likely path of the next impulsive wave. Soon after wave E was completed the stock broke out on the upside and reinstated its larger uptrend. once a correction is completed. What sets the wave principle apart and ahead of other technical approaches is primarily this characteristic of design and form.Technical Analysis . Global Technical Research .27 - . Some triangles are ascending. a specific pattern is never identical to another pattern of the same type. However.
and now all that remains is the break of the "neckline" drawn under the two reaction lows "4" and "A". Moreover. The measured target of the break is the height of the "head" above the neckline (wave 5 to wave A). falling towards the previous reaction low at "4". The failure of "B" to regain the high at "5" fulfills half the requirement for a trend reversal (i. Volume tends to pick up as higher highs are made.Technical Analysis . the uptrend is powerful. descending peaks).e. A closing break below the neckline on increased volume activates this pattern. each swing high must exceed the high preceding it. To re-establish the primary uptrend. At "3" on the graph above left. The fall in prices to "A" is breaking the uptrend. Additionally the uptrend line by this stage has been broken on decline "5" to "A". retracement and wave length as shown on the next page.28 - . The dip to "4" on lighter volume is.80% of the decline from "5" to "A". projected down from the neckline break. However. Fibonacci correlations allow for a more precise method to analyze the wave correlation. considered a correction within the broader uptrend. such a break may occur rather late if the head occurs at a highly overbought level. The market then rallies to "B" which is generally 50% to 61. The INVERSE head and shoulder formation works exactly the same only in the opposite direction. 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. The rally to "5" on diminishing volume alerts the technician that a top may be close at hand. levels off and then establishes a downtrend.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. Global Technical Research . The neckline can be upward sloping or downward sloping or may be horizontal. This basic head and shoulder has one negative aspect: investors have to wait for a break of the neckline to sell. with no evidence of a top formation. at this stage.
. These numbers have some special relationship of their own such as 2..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. 89.618 x 0. 3. 8..Explained 1..... oceans. 377..618 = 3/2. 13. 233.618 . 377. 21. 4) The square of a Fibonacci number minus the square of the second number below it in the sequence is always a Fibonacci number.0.. 610.618 = 0. 987. 2. . the constellations.Technical Analysis .1. Leonardo Fibonacci was a thirteenth century mathematician who developed a number sequence of the form: 1.618 = 0.618 = 2. For example: The ratio of any number to the next number in the sequence is 0.. 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.... 8/13. It is known as the Golden Ratio or Golden Mean (or phi) and governs nature´s growth patterns.618 = 2/3. 610. Fascinating Fibonacci It may surprise you to learn that the universe. 21.382 1. There are numerous relationships within this series.618.382 = 1 Additional phenomena relating to the Fibonacci sequence includes: 1) No two consecutive numbers in the sequence have any common factors. 3.618.618 to 1 and to the next lower number is 1. 233. 5/3.. where each number is the sum of the previous two numbers. 1..618 2.. 2. 34. 8.. 2584.618 or its inverse 0.. architecture AND THE FINANCIAL MARKETS have one thing in common: the FIBONACCI SEQUENCE. 144. . 13..618 or 0. 13/8. 3) The sum of all Fibonacci numbers in the sequence +1 equals the Fibonacci number two steps ahead.... 55....29 - ...618 = 1 0.. 5/8. the galaxy. 5..618 x 0. but the most important is 1. This sequence of numbers has some very important properties. AB/BC=BC/AC=0. 5. 89. flowers.. Global Technical Research ..618... 34.... 8/5. 144. 3/5. 2) The sum of any ten numbers in the sequence is divisible by 11. 55. 987 .382 1 .. 1597. Between alternate numbers in the sequence the ratio is 2. plant life. The ratio is always 0.382. music. man..618 x 1. A B C 0. natural science..
0 Triangle waves 1.618 0.0 Waves A & B & C in corrections 0.618 1.382 or 0.382 1.0 1.0 1.618 1.618 0.0 or 1.0 or 1.382 1.618 1.382 or 0.618 0.618 or 2.618 or 0.Technical Analysis .0 1.618 Wave correlations The most important wave correlations in bull markets (impulse waves) and bear markets (corrective waves) are shown on this page.0 0.Explained Waves 1 & 2 Waves 1 & 3 Waves 3 & 4 0.0 Waves 1 to 3 & 5 1. Global Technical Research .30 - .
80% retracement of the entire bull cycle from 1995 to 1998 0. and a bear market into 3 legs which makes a total of 8. We could show you hundreds of such examples.618 61. Global Technical Research .31 - . sunflowers. The wave pattern and the Fibonacci relations are the language of the financial markets.Technical Analysis . and the larger radius is related to the smaller radius by 1. The Greeks based much of their art and architecture on this proportion.618.80% retracement of the entire bull cycle from 1995 to 1998 5 3 4 2 B 1 A C 0.80% retracement on a long-term basis. Moreover. 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. we arrive at 34 waves (see page 23). snail shells. Financial markets have the same mathematical basis as natural laws.80% of the previous five-wave structure. The ratio 0. The correction traced out a perfect a-b-c pattern. It takes time to learn it.618 ratio of the lower part of the body (from the navel to the feet). 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. The charts above show examples of a 61.Explained 61. This is known as the golden spiral.382 Fibonacci correlations . Spirals on shells when examined more closely are shown to have arcs whose lengths are ratios of their diameters that equate to 1.from the navel to the top of the head is about a 0. The fundamental news and trends are mostly triggered by mass mood psychology.more than coincidence A man´s body. wave 1 traced out five subwaves from 4Q 1994 to 1Q 1996. The decline from July 1998 had retraced exactly 61.618 to 1 is the mathematical basis for the Parthonon.80% of the previous bull trend from 1995 to 1998 at 55. Wave c was equal in length to wave a and the entire ab-c correction retraced 61. spiral galaxies of outer space or the human DNA spiral. within the long-term uptrend. This is because the markets are not only numbers or economic factors but most importantly reflect human nature: crowd emotions in motion. If the subwaves are counted.618. if you divide the body at the navel .
time to maturity. spot and forward interest and exchange rates). to which such an investment is exposed. initial capital paid to make the investment may be used as part of that income yield. Nothing in this report constitutes investment. Some investments may not be readily realizable and it may be difficult to sell or realize those investments. legal. Some investments discussed in this report have a high level of volatility. please refer to the following Internet link: https://research. The market value of any structured se-curity may be affected by changes in economic. Any investor interested in purchasing a structured product should conduct their own investigation and analysis of the product and consult with their own professional advisers as to the risks involved in making such a purchase.32 - .Technical Analysis . in consequence. High volatility investments may experience sudden and large falls in their value causing losses when that invest-ment is realized. but not limited to. Income yields from investments may fluctuate and. and the credit quality of any issuer or refer-ence issuer. effec-tively assume this risk. value of and income from any of the securities or financial instruments mentioned in this report can fall as well as rise. market condi-tions and volatility. Indeed. The value of securities and financial instruments is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities or financial instruments.Explained Risk disclosure Investors should consider this report as only a single factor in making their investment decision. Structured securities are complex instruments. CS will not treat recipients as its customers by virtue of their receiving the report. similarly it may prove diffi-cult for you to obtain reliable information about the value. Investors in securities such as ADR's. typically involve a high degree of risk and are intended for sale only to sophisti-cated investors who are capable of understanding and assuming the risks involved. financial and political factors (including. in such circumstances you may be required to pay more money to support those losses.com/riskdisclosure CS may not have taken any steps to ensure that the securities referred to in this report are suitable for any particular investor. in the case of some investments the potential losses may exceed the amount of initial investment.credit-suisse. The investments or services contained or referred to in this report may not be suitable for you and it is recommended that you consult an independent investment advisor if you are in doubt about such investments or invest-ment services. For a discussion of the risks of investing in the securities mentioned in this report. Those losses may equal your original investment. Global Technical Research . The price. the values of which are influenced by currency volatility. accounting or tax advice or a representation that any investment or strategy is suitable or appropriate to your individ-ual circumstances or otherwise constitutes a personal recom-mendation to you. or risks.
pdf https://w ww.c om/lega l/pb_res ea rch/tec hn ic al_tutoria l_e n. 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 . w hich can b e f ound at: https://www. please call +41 4 4 3 33 33 9 9. includ ing disclosur es w it h r espect to any oth er issuers. 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.com/who_we_are/en/ http://ww w. o ther r epor ts th at ar e inconsistent with . Additional inf orm ation is av ailable upon r equest. any p erson or ent it y who is a citizen or re sident of o r located in any locality. ple ase re fer to the info rmation on in depend ence of financial re se arch. Cr edit Suisse po licy is only to p ublish inv estme nt resear ch t hat is impa rtial. 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. 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. a nd may in the f utu re issue.c om/le gal/pb_res ea rch/a dditiona l_file s/te c h_ dis closure . Nassau B ranch.com/research/disclaimer https://w ww. please v iew the d ocume nt at: https://www. Non e of th e ma terial. 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 . fair and not misle adin g.com/governance/doc/code_of_conduct_en. please re fer to th e C red it Suisse G lob al Research D isclosure site at: https://www.c redit-suisse .credit-suisse.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. Please n ote in par ticu lar that t he b ase s and lev els of tax ation m ay chang e.pdf https://w ww. 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.c redit-suisse . coun try or othe r jurisdict ion w her e such d istrib ution. “ C lose ”is the la test clo sing p rice q uote d on the e xcha nge. 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. a por tion of w hich is g ene rate d by C red it Suisse Inv estmen t B anking busin ess. G uide to technical analy sis Whe re recom me ndation tables ar e me ntioned in the re por t.c redit-suisse . 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. 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. 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 . 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).com/legal/pb_research/independence_en. “ 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 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. “ M T” denot es t he ra ting fo r th e m edium -ter m tr end (3 – 6 mo nth outlook) . 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. A us tra lia: T his rep ort is distribut ed in Austr alia b y Cr edit Su isse AG. copied or distribut ed to any o ther pa rty . the S wiss bank.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. please r efe r t o t he follo wing Inter net link: https://research. Ex cept to the e xt ent to w hich t he rep ort r ef ers to w ebsit e mate rial of C S. All m ater ial presente d in this r epor t. All t radem ark s. F or more infor mat io n on our str uctur e. This r epo rt may prov ide the add resses of . 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. autho rized and r egu lat ed b y t he Bund esanstalt f uer F inanzdienst leistung sa ufsicht (B aFin) . and may in the f utu re issu e. clea r. duly licensed and r egu lat ed by th e Dubai Financial Services Au thor ity ( DF SA) . p lease re fer to T echnical Analysis Explained at: https://www. please use the following link: https://www.c re dit-suisse .credit-suisse.credit-suisse.com/legal/pb_research/additional_files/tech_disclosure. Dis tribution of re searc h reports Except as o ther w ise sp ecif ie d he rein. 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. T rad e ideas may also diff er dir ectionally fr om inv estm ent rating s. a s it d eems appr opr iat e. n or its co nten t. 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.com /who_ we _are /e n/ Global Technical Research . F or furthe r inform ation. In for mation. and o ther pr oprieta ry t rading .credit-suisse. “ ST ” deno tes t he shor t-t erm tr end (3 – 6 w eek o utlook). and reach d if fer ent co nclusions fr om.credit-suisse.c reditsuiss e. 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 . 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. is accessible v ia the w ebsit e at : https://w ww. 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 . 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. Th e rat in gs are “ +” for a positive o utlook ( price likely to r ise) .Explained Disclosure appen dix Analys t ce rtifica tion Th e analyst s id entif ied in th is r epor t here by cer tif y tha t v iew s abo ut the compan ies and t heir securities discussed in this r epo rt accur ately r ef lect t heir per sonal view s abou t all of the subject co mpanies an d secur it ies. nor any co py of it.c re dit-suisse . “ 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. In addition. Dubai: This inf orm ation is dist ributed by Credit Suisse AG Dubai B ranch.c om/gove rn ance /doc/code_of_ conduc t_en . tr ading ideas m ay diff er f rom the compan y re co mme ndation s. 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. 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. mar ket m aking . This r epo rt is not d ir ected to. 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. au thor ized and reg ulated by the Swiss Financial Mar ket Su perviso ry A utho rity . may b e alte red in an y way .pdf https://w ww. 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 . C S m ay hav e issued. a S wiss b ank. Ge rma ny: C red it S uisse ( Deutschland) AG . The analy st s also cert if y that no par t of th eir com pensation was.33 - . and is dist ribute d on behalf of C re dit S uisse AG . u nle ss specifically indicated o ther wise.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. is un der copyright to CS.pdf https://www. stat e. 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. Im portant discl os ures Credit Suisse policy is to publish re se arch re port s. Th ese businesses include specialized trading . w ebsites.c om/lega l/pb_res ea rch/in depen den ce_e n.credit-suisse. is.com/legal/pb_research/technical_tutorial_en. risk arbitr age . C S is involv ed in many b usine sses t hat relate to compa nie s men tioned in this r eport. 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.credit-suisse. a t rading idea regar ding this secu rity . the Sw iss b ank. r egister ed as a broker d eale r by the Sec urities C om mission of the Ba hamas. T he inf ormation. CS has not r eview ed the linked site and t akes no responsibility f or the con tent contained ther ein.c redit-suisse . T hose re ports r ef lect the diffe ren t assump tio ns. 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. 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.Technical Analysis . or its sub sidiaries or it s affiliates (“ C S” ) to any r egist rat ion or licensing r equire men t w it hin such jur isdiction. indep ende nt. Credit Suisse Hong Kon g B ranch does no t hold an y disclosable inter ests. CSS B do es not g uar antee t he per fo rm ance of . The “ Com men t” column in clude s the latest advice f ro m t he analyst . 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. F or a shor t int rod uction to technical analysis.com/riskdisclosure http://ww w. with out th e pr io r ex press w r itten permission of CS. 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. F ran ce : This r epor t is distr ibu ted by Credit Suisse (F ran ce ). or inte nded for distribu tion to o r u se by . 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. 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. pu blication.pdf F or m or e de tail. based on dev elopme nts w it h th e subject co mpany . but C S m akes n o repr esenta tio ns as t o t heir accura cy or complet eness. 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. B ahra in: This rep ort is d istr ib uted by Credit Suisse AG. a b ranch of the Sw iss bank. th is r epo rt is dist ribut ed b y Credit Suisse AG . 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. B ahrain B ranch. the in formatio n presen ted in this repor t. tr ansmitte d t o. B aha ma s: T his r eport w as p rep ared by Cr edit Suisse AG. or inco nsisten t w ith. 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. o r co ntain h ype rlinks to.
inclu din g ind ividu als. a Swiss bank authorized to provide ban king and financial services in Italy. Bang rak. UNITED STA TES : NEITHER THI S R EP ORT NOR ANY C OPY THEREOF MAY BE SENT. 00005. JA PAN: NEITHER THIS REP OR T NOR ANY COP Y THER EOF MAY BE SENT. Zurich Tel.macdonald@credit-suisse. TA KEN INTO OR DISTRIBUTED IN J APAN.com Information about other Research Publications Credit Suisse Research & Publications SQF Uetlibergstrasse 231 P. Sources Charts in this report are from MetaStock from Equis International and from Datastream. Thaila nd. with its registe red address at 9th Floor.zingg@credit-suisse. Le s Ech elo ns. INB 010970631. or relate d financial instrume nts. M umbai 400 018. Copyright © 2012 Credit Su isse Gro up AG an d/or it s affiliates. Data is from Reuters. Bloomberg and Datastream Th is re port may not be reproduce d either in whole or in p art. Qatar: This informat io n has b een distribute d by C red it Suisse Financial Services (Q atar) L. Dr. All rela ted fina ncial products or services will only be available to Business C ustom ers or Market Count erp arties (as define d b y th e Qat ar Fin ancial Cen tre Re gulatory Au tho rity (QFCRA)). an d who h ave sufficient fin ancial knowled ge. who have opt ed to be classified as a B usiness Custome r.L.csintra. Indicators are by Credit Suisse Private Banking.com Michael Macdonald. an Autho rized In stit ution reg ulated by th e Hon g K ong Mon etary Auth ority an d a Reg istered Institu tio n re gulated b y th e Securities and Futu res Ord inan ce (Chapte r 571 of t he Laws of Hong Kon g). 0-2614-6000. Imprint Publisher Rolf Bertschi. Jerse y Branch.research@credit-suisse. R ama IV Road.email@example.com Please call your Credit Suisse Relationship Manager or mail to publications. United K ingdom: This report is issued by C re dit Suisse (UK) Lim it ed and Credit Suisse S ecurities (Europe) Limite d. INF010970631. G uernsey: This report is d istrib uted by C red it Suisse (Gue rnsey) Limited. n or will t he Finan cial Se rvices Com pensation Sche me be available if th e issu er of th e investme nt fa ils to meet its obligations. Box 300 CH-8070 Zurich E-Mail publications. bo th aut horize d and regu lated by the Financial S ervice s Aut hority.C . Russ ia: The resea rch cont aine d in t his rep ort doe s not constitut e an y so rt of adve rtiseme nt or pro mot ion fo r specific se cu rities.Technical Analysis . in Je rsey is: TradeWind House. Thailand: This re port is distribut ed by Credit Suisse Secu rities (Thailand) Lim it ed. 27/F. + 91-22 6777 3777. Tel. Sucursal en Esp aña. re gulated by the Office of t he Securities and Exch ange C omm ission . au thorized un der numb er 1460 in th e Register by t he Ban co de España. Credit Su isse (Gib raltar) Limited is an indep enden t lega l ent it y who lly owned b y Credit Suisse and is regu lat ed b y t he Gibraltar Financia l Services Com mission. with liqu id a sset s in excess of USD 1 m illion. Co pie s of the lat est aud ited accou nts are available on re quest. Bangkok Te l. Hong Kong: Th is rep ort is issued in Hong K ong by Credit Suisse AG Hong Kong Bran ch. and also distribut ed by Cre dit Suisse AG. a ban k incorpo rate d and registered un der It alian law subject t o th e supervision an d control of Banca d ’ Italia an d CONSOB .com Pascal Zingg. The protection s mad e availab le by t he Financial Se rvices Auth ority for retail clien ts do n ot apply to in vestm ent s or services p rovided by a pe rson outside the UK . TAKEN INTO OR DISTRIBUTED IN THE U NITED STA TES OR TO ANY US PERS ON.com Christian Sutter . Managing Director Head of Global Technical Research Tel. Plot F. auth orized and reg ulat ed b y t he C om mission de Surveillance du Secte ur Financier (CSSF). India: This repo rt is d istrib uted by Credit Suisse Securities (India) Private Limited ("Credit Su isse India"). J ersey Branch.grunder@credit-suisse.. Local law or reg ula tio n m ay restrict t he distrib ution of research repo rts int o ce rtain jurisdict ion s. 22 Esplanade.p. an indepe nden t legal ent it y registered in Guernsey u nder unde r 15197. This re port will no t be adve rtised in any mass me dia in Mexico.com Technical Research Beat Grunder. Th e business address o f Cred it Suisse (Gu ern se y) Limited . Th is re port does n ot cont ain any ad vertise ment regarding in termediation or providing of ban king o r invest ment advisory se rvices in M exico or to Mexica n citiz ens. Jersey J E2 3QA.com for your personal e-mail subscription. St Peter Port. An nie Be san t R oad. All rights reserved. Mexico: Th e in formation co ntained he rein doe s n ot constitut e a public o ffe r of se curities as de fined in the Mexican Se cu rities Law. Sh ivsa gar Estate . India.com Intranet (for employees only) http://my. which is regulated by t he Jerse y Financia l Services Com mission. +41 44 333 2459 E-Mail: pascal. which has been authorize d an d is regu lat ed by th e Qat ar Finan cial C ent re Regula tory Aut hority (QFCRA) u nder QFC No. Jersey: Th is repo rt is distribu ted by C redit Suisse (Gue rnsey) Limited. Sou th Espla nade. 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. re gulated by the Securit ies and Exchang e B oard o f India (SEBI) unde r SEBI reg istration Nos. INF230970637. Spain: This report is dist ribute d in Spain by Credit Suisse AG. Gibraltar: This report is dist ribute d by Credit Suisse (Gibra ltar) Limited.sutter. INB 230970637. +65 6212 6655 E-Mail: michael.34 - . re gulated by the Mo netary Aut horit y of Singap ore. are associated b ut indep ende nt legal ent it ies wit hin Credit Su isse. Guern se y. Zurich Tel. +41 44 333 2069 E-Mail: christian. St Helier. A. a Luxe mbou rg bank. Assistant Vice President.directnet. Senior Vice President. +41 44 333 24 05 E-Mail: rolf.net/techresearch Internet All Technical Chart Outlook Publications can be downloaded from the Credit Suisse Online Banking on http://www. This research re port does n ot re presen t a valuat ion in t he m eaning of th e Fede ral Law On Valuat ion Activities in the Russian Fed era tio n and is pro duced u sing Credit Suisse valuation m odels and me thodo lo gy. Credit Suisse Securities (Europe ) Limite d and Credit Su isse (UK) Limite d. with it s registered addre ss at Helvet ia C ourt. Worli. +41 44 333 5358 E-Mail: beat. wit h its registered add ress at 990 Abd ulrahim Place Bu ilding.A .. 12C020A Global Technical Research . experie nce and und erstan din g to participat e in such products and/o r se rvices.Zurich Tel. Luxem bourg: Th is repo rt is distribut ed by C redit Suisse (Luxem bourg) S.2@credit-suisse. C eejay House.Explained bee n prepare d by one of its affiliate s. Silom. Singapore Tel. Italy: This repo rt is d istrib uted in Italy b y C red it Suisse (Italy) S. S ingapore: Distrib uted by Cre dit Suisse AG Singapore Bra nch.O. witho ut the written permission o f Cre dit Suisse .research@credit-suisse.
This action might not be possible to undo. Are you sure you want to continue?
We've moved you to where you read on your other device.
Get the full title to continue listening from where you left off, or restart the preview.