UNIT 3

Define lechnical. Analtyek movemenys. 1t takez the thelp

to tomcast. futune price
Ar astudy o bast oice movementa entarEents c Pmate
btst taome t buy o RelW 2cDrlies,2tody
uedamentnl analyes to suggextl
and fiqudity oh makd
ARstmplions o teehnieal anoyaia
-

Masket otCess a patltm

demqnd Aubly
Tuce ia detinined by
3) Manket dheccunts evory ingomatin
4 fast prie 4«he to pohadich gutune mcevalua
5 oice movemet 8upfoatad by p taada
Basies of tohnical, analt,sis -

Dnice
2)Time
Votune alaa. take»
DBaeadts- Eteut to þrice change haue
wbieh
betseen technical. k
Rundamental analiyri.
2 What ie te disfoence
Pundanentad Analyik
AnE Technical. Analyav
movener0 Establiah tong Teh vGleus
he dict ehost twm þoce to economy ee
U9es inlunal å datu salatocl
2 UBes intmol macnkat data
pvestods
Benifitiad. todu teng.
3%enigitial ta. abetnudatans
4 omplex due to dcda &caleuladions
Simple
May cotaun 8ome esrch.
5 Melbod bater than zundamevtal anakyi

Tuebni. anay16.
What ahe ta tot eMazkat Maket cou individual, a tock» indicato
Idicatons
martet Chosts, Tothd Pines, Moving averaçes
Poice indicator | Deo Theeahy, Hliot wave "lheony,veadtb ch
indiceator Cacilatons, Cab wave "thty.
1bdicafoos,neustenht tous, Sentiment
Ebatidenceindicalos, Mast odive Put
voturt guppodt& heBistarce fexd
Vetume indicatos| Neio yotk and Apieican exchang,R
Contrang pinion 1heony
Ans eveleFed by Chantu Deut he maskats Faimny ted
4ypothesis t No Singl individual en byeh c0n infkutne
Hypotheis2: Monket diseounte eveything
understand t
potheain 3: Tts mot a.teot t beat te moket but þrtvide a toay to

Thace tybes tochde diseuaed in Dow Theony.

Shuay taend,- Tt o a fong tnm t-end in makat. Tt can la a knoad uhwahd,
0 tuo.
movemevit en a bnoad dcsncond venent It may tast Ren ayea
rmcverienla
eeondaby Toend-Mgo knoton as intmediate tnd it þrovides cobuetve
To imaby thend, This tast fa 5weeka tb gmonth. "he Becondooytod intonukb
i boimay toond and, ts abflies susbraining zeuse n pmivay tbod.
Minoa bend- Thebe a 8htat to taends. Tre nane i2 iven to theday to day

poe tnovenendt/pluctuation in dhe mawkt, THese abe 9hea clnaion and aa noh
ensidutd rmuch Ainigicant to ka give value by Onalytial punhes.

Raing tound tine

ToP

Pice Bottom

uling. Taandfine

Time Days)

ukward ted is bull

Taimahy loend- faice tyend may inCeose co cleevuase. An
mOnket 4 decnasavdl bend i btar maket.

omay
Tend
T T To Speculotion
Tnmproveent in phase
Covporadi Eaning
T 3 3hd Phase

2 lop Yaice
9econcay
Toend
Ccoobection)
Revifal
Phase

Time CDaus
Tee phases o imy tands in ball manket
 hghor tan the paeVicu)
tho þeals (7,,T,.T), £ach þeak.
in
Tn bull manket digwe howR
thee bottoma: each hottom in beng tgherDian þreveus baTo
peak. Bottom tB,Ap ,B,) he

ehe e Uese phases poiaxy trebd.

in Bll mnket undes
in the utno bwines
Nevival phase Pnst sefcsent by devivmg
-

Od»
brice deoline tp otfeat lo ony eurty
laket eozhectton Tt nefevoto
- o
n mahtet rmee
a lempohahy ubaaon
hankat inde etlouhg honds anc/0a. vndtxe,
ipceose n ta þnees of ztocka,
Kally- Tt ocontintueous 9xoLOtl f
investor 2e rth Phohe
poDe invcstoo
to buy. It goo doon becosue
Revival phae eneownas
seithing brojit and antieipaion of LoA of hupe
o Reces s1on
a dcnfum unlhor Distrtk 2 eNing

T isst To
72Secondfob
T 9hisd B
i
b Post bofom
B2 Second Doflon
6a Thivd betlom, Time dayR)

totnds r inEmediati trondi moves against may

Sacondany Toend- Seçondaby T667.
Ond rveide a cobyecfio, t 4oes t 337 to 667. down
wad in bull makat and 33
in beam mahket,
JTino "loend- ARso knoWn as Tertiy Tend.fmoveneds a dhandom pluctuddions ond very

Bbost dlubation
w h a t ane Pibonacci nunars?wht is te oieation of Fibeonates numbed instecknadter?

Anz Developed by Leonesdo Pibovocci, ther is a set o mmberseqenc named agtr Pim,
Sequnca a glows- ,1,2,3,5,6,13,21,34, 55, 89, 144, 233

AFtr tha jnitiad pair o one, eacb succeeding. nunbes 12 91mpy Su o potious tuio,
Hhother zeadhuu e thie tuory s that afër13 umber) aadio o eadh zibenacei nlumiber to it

SuesBca 0-618, Examhl

0-618
132) 0-618, 34/21 6 618,34/55
ia evedtad by "Tokina too exhveme peints tusuatly
Tn tochniead analyas, a Hibonaeer oetraement
ta vEvtieal dlustance by te key
amajon þeak ond trough) On a atock chast ed ond dividing
tese tevels ane idebizied
bopocei dadts o 23 6,88 1. 5e,61-87 enel too7., nee
haigental 4ina dh drmlen 0nd ue t identidy possikle supþort 4
duutanea 4evela.
abd aylieabilidy in almrot any-trading
This te mort widly ukd tood duL to B\licty
8an be u«d te idetidy thonr & ousitane, ploe stee coder t0sq4t i a and even adt
 a oimahy mechaniaun in a courtertaen tomdtng gtoaitagy

alhat Pist-viave.hey
paket tellows Hepetrtive dng
| Jnoduozd by RNBiet in 1930 u thut stock
angTin wayeu. Accopding to fhle thory, tong tüm majon þatters nay eoni
bear
t v e susaie aths oai wiaves. Wbes Ven i a bulmakt,th t ovwa
will be a aollouss-
The patem conaiat o} tve vave
in which ,3,5 moves in main tend and
2,4 moves in
comcheon toend.
SQme dounwrd thond is visibk in

bed makat,

Deinete vanious ehant pattum

A Suat &Resistance- The fjue belou shous yahnious tewels o 3u}foat

Tme

and ton e, When pice o u and zutu ho down tda oice tevel and
ges tu and bouyca baek» t5 te sgame mu Revel it boued peoioule in
0 Auet 0n ta
kno
other kand tke i RMity i8 toueling ae riou Peuel
tuwo n mmcn tine rt i khotm a deistance, Sulhor &
vnesistance tevels alcoays
change
 hineheacdghotders
eges t6, tioo ubuoonel trinds and again a uhtoar d totd in middla bud igher 1h
the beth other tbthds. Head
Right shdar
Thveosmation ig a be areth indicahor. T} bnce by teft shetder
anychonee zall beloud tu neekfine,tmeann Ponce
that te uhuward cfimb Aas endad and þsice in) Neckine
Csl stot comin doen no.
The t tun knoun s ett ahetde in formed
when poice eaeh ta to under a stong bayng
Impule. Then trodig votume betome teas and there is a shoA doonvd ecia thie iu
ettcoed by ancther aeaction Siuh vodume advance, cohich take the price to a igher top
knon 0s the hend. "hig is Jodowcd by sueaction in tess vokune which take the price doon
to a bottom nem t emfier doonainre third aalocu taking price tb tte heij
tess thon te head but Combarable 6 tezt ghetAder. thiz oal n t t in tormot ion o
tse aight ghoulder, A oxzoutal tine jeioing ta bettoro of this Rormadion is khoen as
h eokf ine
Invented ead & gbouldes SThis is aevesse pattern o ead & shoddea, Tá i the end

oh becish toud. Tt eonsisto tace bottos,

Fiva bottom istke tet ghoutder anot.er ia Aead
Ond Yast one i aight Bheulder Neckt ine

G9 bat ae contimuation pattömk ?

Aw ptr a ghoh rike anfal the boice tsnds lett aholde
moves along- otignal tend. lhese patiyn QN Riyht sheuSALr
oved. during sidetday moyemeti e shonenice
Cd oallel eomtinuation attn,, because te
indicat cortinuation tke tbend þrevailing begor te fomation te pattan.
ay Toiang4- "ionga os zoburnecd wbe» tte priee vnovermenta dexulh in tibo on mose
ConBecutve descendingaTbs and to 0d omae congectdive Q88ending bottoms,
be taiange zonation moy oecuhe dning a bull phase

btade phase. Ti ether case, tocudd mdicti a eontmuation

o bi Gend. ta generallgse, tat valume dioiniabes
duasing, ta movemert witin ta tanaryaultrbattm js N
Lualyaccompaníied by ibertasing naknme
 Contitnuotia
mst veliakla.

6)Pag&
Pennatb- These ana
conAideotd as
manket,
betweena ara
betvecna
hey occurd sa haems.
in a ast moving withtet
Shebbeset a borie pause toks tike a þanalletogkam wo tndA
Tte t domaton
Cx a s t f lin
prise, is epeotad E jalLdubmg
ti,
tihes. Te vekerne qf trading
tihes oring too prmallel
boeakig-out am paittem
tke
þikub en d
ohmatien o Vi jaz, tocks fike a sumnetrical triangl. "he ttperderdtine fome
and again
be penantoarahion
the touo tedkina zomed by
te estepdcuntrads, wbedn as
y ccnneting tope is toared mid uway betuoen
oniae uhwascu. The
benments
Cenneoting,the bottoma continuation e same Tohend. he
tbend cnd signals te
erbe a ballsh en beazjuh
makad by imoeased
volkume oftradin
t þattm is
bak-ot om

\
ne Moving,Aveaya esrtain get o dato. In
cose odtcmcal
gmean a a
Movir Aveages is 8i0 eases ofstockgeraporieuer
coe in mst aeaaertd ky elosing brie
aralsie,tese dai b deteut t ztast qf tend, jlec:|
inditator. T þuwpose is
deya. Tt a atbnd zollocoing bevesal tend,
progaes as6elosaelert ts
ts ao ekanle in a 5 kys moving
aveaje
lovin, aveKees moves zan
urth data
5 as days o i pass He
w{IA Aeave the days tomtat.
price oS daya is
divided by
The wege
avergo al3o moves,Movma Ctosin þrice is used
As days movea

is tocompaae Tki avehag duun vanous days

movin aveage taku tke avernje ang
Averag Agimplh MOVNng aernge
loving
-

Sitmpla
take ckosing od oaning bric, by avdd sell|
gven tine duation A s e r can

gi nal wi be rovidsd by gath atobnieal anglyst

t

wben-
|Abuy s'andl is enenad
the MA tine, Tt stant zallim,bo bahehading
Steck price tine ik above
intoMA ine it begama, to dhise agatn
tine tchsle the MA tive is stilO asing.
) Hock. price tine talbLdo MA tine s Mattening
Aine whi the yrath e MA
3) 9tock picetime ises through tie MA ot.
Tust ophesite tappens in the abeve three
tyadint yie-Com.
sItuation when sell sianal s eneatal
 Exponentiad. IMoviAOe
ng aweyoge- Ris on altemalive nethiod tor spiosthing, out te data on gtcd»c
EA is cateuitud by
teto abing, jermala
EMA Yoevous £MACI-facla)+ Cfnesent þie)xfecka
hee, tacton an grmoothina Cchstunt 2
17 Numbo of daw fon which EMA is cadeulatid.
Days 3 4
Cfosin eice 33 35 34:5 36 3 9 40 40 5 33.5

Day Cfosing pice EMA

33 35 (Cfosing price is takn oremAfai Dat)
35 33 1-033) +35x O33 33-66
3 37 5 33-6 (1-033)+375 X0:33 34.93
36 34 93(1-033+36 x 0:33 35 26
35 28(1-0-33) t39x 033 365
5 39
36 5/-0-33)t fox0 33 3466
40 5 3766-0-33)+ 405 X0-33 38 6o
38 5 386o(1-6:33)+ 585 xo-33 34 567

5 day EMA zactohs . 033

5t

WhatWhat ase Cseilliators? the maket momentum

whicb is

HIDTtAegesti yeBocty o þrice

changes acHecting
in pritk. Oseilatons shotos ta ghau þricemovemerts
measuad b he nai change
One ertreme to anotker, Tre moyements aeross a aezetnee
OChass ejemte pointo
etepe t onotte, The momentum indiccdos-
pointfrom dhe
overaid conditions t ta senp odt maklt.
verbcght
bA ossible naveal ted.
e)A vise ah declive in momentun,.
Bscidliatos de oToetiyhs-(00elaive StoengthTnder, h) Rato o ebanye.
ahead o t
(a Relacive &Havgth Tndax t gives buying and oelling signads /othodctunities
-

matt RST RS xX l0o

RS

Where- 9 verage o upridnds psice ebange over zeladad nunmber o das

dver aselectid ramer of day
Averoge of dowrlard þrice ehange

atu
 Ave ain
pea day
day
Average doss fer dayeharg
ovey þenod
Change
Lass
Day Cteting i e

132 -
132)
C134
2 134)
34 C132
-

2
3 13
5 (137- 132
4 131
2 (139 131)
139 3 C136- 139)
36
2 (138-136
138
4 C142 -138)
42
(142 142)
9 142
2 (144 - 142)
44 3 C141 144)
141
2 1 4 3 - 14)
12 143
3 4(147 143)
147
2 -(14S-14)
14 45
144 2 C147- 145
736
Avenag ain () » 2+S42t4t 2t2 t4t2
14

Averau tess (D) 213t3 t2 0:714

14
1726
RST 0714
x loo 7142
I t :786

O-714

-
123 4 S 67 9 Time (Da)
 L valiga hanges facm 0 t loo,
(3.6
ules tos tke 4xabh ia iRST CoOAne o rom ab6ve bekud
and i8
zaling, ts time to sedl ti e
sdling.cttostulity). Houever ywhen R3I eroses 3o ro
bedoe To abeve and is
hising, it ia the time te h tie- buyimg oppartutp.
KaL C} Change CROc) Todieatoo-ROC. ndicatis the þexvvtoge. chai phnce
9peitied time penod
Change in bnz
ROC in n
cdaysx l00
Ponice n days ago

X loo

Whe, N Neus þrice Ci.e today"h þsica)

Otd bniu (oTgnalritu) n days ago
Exewn pla- Day etosina Yoicz ROC
35

36
36 5

35

3
38

1 38S
(37S-5S)x1o0 +01
37S
39-36)Ao0 +08
39
(40-36.5xloo tlO
40
39 5-3S100 +3
39 S
( 3 3 7 ) *1o0 t0S
12
37 S
(34S-38xlo0 -02
13
3
nsben ROC cave i
opotunrie, Rudo is
Aralgat use 2zerntine jer idevhsing bujing selling
zeo to above 2er0), it indicale bugin ofhorunit,
Cring ta zeotine (rom belbea Zero t idedas tine,
i8 moving zon) abeve Zed tine to kalous
howeer When Roc cuve

asaoking oforhunity
 headlh cy ka vaskatjglo
fume,C) Oddtof Lat
follosing. tems aJ
-

12 Degine
(A/D) tine,
Advance- Dedkne
Afso k»c (on s
Cad DARadth Tt the
Flmlet advance d (Gone up and
ADUEY bettoeen nuber oh Rhanes beadth
C Daytaf
kncun s
dow) cn a day i
d3etnca
ehe ccame valuis.
Xmnu deckmecd ae oddecd to nd
eumudative
Markef
Eahdey diGfesenees hidfestnce
B-eadth o
Advance + beelint-)
Day
t 230
70 +23o
-4o + 190
4T0 5l0
- 9.6o 70
360 620
380 t205 +133
585
+05 +435 t5o
The Cumulalive dipference is klclad in o tne aph and Compaed t
motat inder, T market inder moving upcrd and bradh of marhet o oving
doumubedb it indieatt market i goi to ha hembk. ¥markat index pmcving
| decnecond qod beaclth ct martat movig uheards mean oankat i fitalyt
twn bulls.
C6 Netau - Vetume o tsade i te trtal number of gharas traded duwing a

gheifie tirne cluvdion, Hlhe geeusity a tgy brados vakre will b high
ad fes tadas vofura t l lke s .
co Odd tot tading- When an invesfod tvade tess taun loo ghanas 8uch
trading b knoun 0b oddtat tsa dus

13 Dezine Crap lave Thecoy

Ang A Cah io e chat is an eny Bhooz betut a tading texiod chd th

8loeing þéiod. A4a i an hus en

a pree in wbich tbex ien no

tovadas. Nomally thia eecuns atur tu dose oj te makat on one day and
next day obe
Type oCah8-
Covmmon Capt- Also knosh as ahaa
a, balii mjhap,o Tompovary h
they eccu wheh trading, is bound betuoen su pert+ duistanee
9evelon aahott shan time.and aket rice j moving sidewassl