PELOSWING PRESENTS

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ANALYSIS
Support and Resistance/Trend Lines
Rule(s) of Thumb
Price Action & Candle Patterns
Technical Indicators
Strategies You Can Use Tomorrow

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TO THE NEXT LEVEL
FOR EDUCATIONAL PURPOSES ONLY, NONE OF THE INFORMATION SHOULD BE TAKEN AS FINANCIAL ADVICE
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Glossary
Support and
Resistance/Trend Lines
(pgs. 3-6)
Rule(s) of Thumb (pg. 7)
Price Action & Candle
Patterns (pgs. 8-14)
Technical Indicators (pgs.
15-18)
Strategies You Can Use
Tomorrow (pgs. 19-21)
 SUPPORT &
RESISTANCE
At Support, Sellers are exhausted and
Buyers are starting to take the lead.

Price
Rises

As you can see, sellers were exhausted after ruling

for a series of candles. Once price hit the support line,
the buyers came into dominance and price rose.

NOTE: Support is a zone, just like in the example above a

candlewick, and in some cases even a close of a candle, can
disrespect the support line you‘ve drawn - or not even touch it.
 SUPPORT &
RESISTANCE
At Resistance, Buyers are exhausted and
Sellers are starting to take the lead.
Multiple Rejections

As you can see, buyers were exhausted multiple times when

trying to take price higher. Once price was reaching the
resistance line, sellers came in and price dropped.

NOTE: Resistance is also a zone. Just like in the example

above, a candlewick, and in some cases even a close of a
candle, can disrespect the support line you‘ve drawn - or not
even touch it.
 The more price respects a Support or
Resistance level/trend, the stronger it is.

STRONG

WEAK
When price breaks a strong level/trend, the
move afterwards is explosive.
It‘s important to note that price action will not
always be perfect. Sometimes price will go
lower or break support to find buyers and gain
momentum.
Price tried multiple time to go above
resistance, and even had to have a serious
pullback to find the buyers and the
momentum to have a breakthrough.
 Resistance & Support can also be
trend lines, which can lead to
interesting formations, but the
principles are still the same!
For example, when price is wedging
(triangulating), the longer it stays in the
formation the tighter it gets, which leads
to a large move in price once it breaks.

Price constricts as the triangle of

Support and Resistance reaches a tip,
the breakout is built up momentum,
usually from a catalyst (legislation,
earnings, news, etc.)
 RULE(S) OF
THUMB
At least 3 ‘touches’ are needed to draw
a Support/Resistance Trendline/Level
(the more ‘touches’/respects a line/level gets,
the more important or stronger it usually is)

Price action is tricky, if price breaks a

Support/Resistance Trendline/Level
wait until the next candle closes to
confirm the movement

Try to have as many confluences

(reasons) for a trade as possible.
The more boxes checked, the better!

Do your due diligence before the market

opens. Don’t scramble to find a trade to
rush into because you are unprepared -
PLAN. FOCUS. EXCECUTE.
PRO TIP: PRINT OUT THIS PAGE AND PLACE IT IN A VISIBLE LOCATION WHEN YOU ARE TRADING!
 PRICE ACTION &
CANDLE PATTERNS
Price action is all human psychology. The only
reason that price moves is because someone
believes that the current value is different than
the current price and that others will buy or sell
to move that price after they have entered.
Therefore, every movement of price is
made by a person, and a collection of
people in control (sellers or buyers) will
dictate the formation & direction of price.
On average, a specific candle pattern can
be identified to predict the move that will
happen thereafter. Studying these
patterns and candles, paired with other
strategies and theses, can lead to great
profit and success.
Let’s look at some examples!
If you’re unsure what a candle is,
please download the first eBook at
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 PRICE ACTION &
CANDLE PATTERNS

This type of candle is known as a

hammer. Effectively, how a hammer
is formed is price moves in a
direction and pulls most of the move
back in the opposite direction,
leading to a long wick and showing
that the move was not warranted in
the mind of the market, and
reversal can follow shortly.

Bullish Bearish

The Hammer Candle can be followed, or come after

a set of longer wicked candles which also indicate
weakness in the direction of the wick. Waiting for
the next candle to confirm the directional change is
always a great risk minimizing strategy.
 PRICE ACTION &
CANDLE PATTERNS

This type of candle is known as a

doji. Effectively, a doji is formed
if price moves both higher and
lower in the same candle, and
closes near the opening price.
This leaves a cross-like candle
behind, signaling neither bears
nor bulls are in control.
i.e. indecisiveness

Bullish Bearish
Doji’s can also be present in reversals, the
context of bullish vs. bearish lies in the
context of the previous candles more so
than the color of the doji.
 PRICE ACTION &
CANDLE PATTERNS
Another popular Candle Pattern is an
Engulfing Candle. This occurs when a
smaller candle is completely engulfed by a
larger candle, usually of the opposite trend.

Bullish Bearish
In a Bullish Engulfing In a Bearish Engulfing
candle, a red candle candle, a green candle
will be followed by a will be followed by a
green candle that red candle that opens
opens below the above the closing
closing price and closes price and closes below
above the opening the opening price of
price of the red candle the green candle.
 PRICE ACTION &
CANDLE PATTERNS
Triangulation is another great pattern to
trade. It is formed by lower highs, coupled
by higher lows (or a strong, horizontal
support line). As time progresses, price‘s
range tightens and leads to a massive move.

$COST
1D Chart

False breakouts are the #1 challenge with trading a

triangulation pattern. To combat the risk of a false
breakout, we wait for a test of the support/resistance
line after the breakout, and a confirmation candle
afterwards to confirm the direction of the movement

Zooming in to the $COST chart

above, you can see that the
following day (and even the third
day) tested the top line of the
triangle and DID NOT break back
into the structure, confirming a
bullish outbreak.
 PRICE ACTION &
CANDLE PATTERNS
Flagging is a favorite among traders. It is
formed by lower highs, coupled by lower
lows - usually a pair of parallel lines can be
drawn to outline the flag. A Bullish Flag will
usually point/tilt downwards, while a
Bearish Flag will tilt upwards.

$AMD
1D Chart

Just like Triangulation, or any other breakout pattern,

we must be careful for false breakouts, and always
look for a confirming candle and/or a test of the line.
Zooming in to the $AMD chart
above, you can see that price
broke the trend, but closed
within structure. The following
day was a gap up, and tested the
structure but DID NOT break back
into the structure, confirming a
bullish outbreak
 PRICE ACTION &
CANDLE PATTERNS
A Head & Shoulders Pattern is great
formation to play for a short (or long for
inverse). It is formed by two shoulders which
trade similar price, and a head in the middle
that trades above the price of the shoulders.

$TSLA
1D Chart

As with many patterns, a H&S

pattern does not have to be very
pretty or precise - but the principle
will still stand.

For a H&S, Traders will usually

wait for price to break the neckline
(blue line in $TSLA Chart above).
As you can see, Price retested the
neckline and rejected it again,
confirming the Bears/Sellers are in
control!
 TECHNICAL
INDICATORS
Relative Strength Index (RSI)
RSI is a momentum indicator that measures the
magnitude of recent price changes to analyze overbought
or oversold conditions. RSI (14) uses 14 periods to
calculate values. RSI values range from 0 to 100.

An RSI of 80 or above
indicates that a stock is
overbought and price may
have gone past fair value,
in which case price can see
a bearish pull back

An RSI of 20 or below
indicates that a stock is
oversold and price may
have gone past fair
value, in which case price
can see a bullish reversal
 TECHNICAL
INDICATORS
Moving Averages: 50 and 200
Moving Averages (or MA’s) are technical analysis (TA)
indicators that helps level price action by averaging prcies
over X period of time. X can equal any number of Candles
that you’d like to average. The most popular are 20, 50,
100 & 200. If you see a post that says 200DMA, the D just
stands for Daily Candles.

As you can see, when the The opposite is also true,

50DMA crosses below the when the 50DMA crosses
200DMA there is a large above the 200DMA, price
chance that price will have is likely to have a large
a large move down. move upwards.
Price above or below the 50 and 200 DMA is also a good indicator of
direction. As you can see, when price broke above the 50 & 200 DMA
(especially after crossing), it stayed above the 50 DMA for a long time
 TECHNICAL
INDICATORS
Bollinger Bands
Bollinger Bands are a type of statistical chart characterizing
the prices and volatility over time. It consists of a middle
band (which is a moving average) and an upper and lower
band or bands. These upper and lower bands are set above
and below the moving average by a certain number of
standard deviations of price, thus incorporating volatility.

In this example, we have a middle line (orange) 2 standard

deviations away from the middle line (red lines) and 3 standard
deviations from the middle line (blue lines). When price reaches
the 2nd or 3rd standard deviation lines (top or bottom), the
thesis is it will make a move back to the middle line. The more
standard deviations away price is, the more likely it is to return
to the mean/middle line and in a more aggressive manner.
 TECHNICAL
INDICATORS
Volume Weighted Average Price
(VWAP)
VWAP is another useful technical indicator that takes
both price and volume into account. It is used on
intraday charts, rather than on larger timeframes such
as when you are plotting moving averages. It that
resets at the start of every new trading session.
Overall, it is a benchmark that represents the average
price a security has traded at throughout a given day.

The Formula:

VWAP = Cumulative Typical Price x Volume/Cumulative Volume

Typical Price = High price + Low price + Closing Price/3

Cumulative = Total since the trading session opened

VWAP is calculated by totaling the

dollars traded for every transaction
(price multiplied by the volume) and
then dividing by the total shares traded.
 PREMARKET
STRATEGY
Premarket opens at 4am EST, and ends when the
market opens at 9:30am EST. Premarket volume is
lower than during Market Hours, but trading still
occurs and levels and trends are made.

$TSLA
2/2/23
5m Chart

As you can see, during

Premarket (beige area) a
support level was formed

Price clearly broke through the support before Market

Open. However, shortly after open price shot up but
did not have the momentum or buyers to continue
above the Support turned Resistance. This would be a
prime set-up for a short off of a premarket level!
 DAILY
STRATEGY
The Daily Strategy consists of using the Daily
Timeframe to find Support & Resistance
Lines/Levels.

This is beneficial as these levels are much stronger,

and do not take into account the swings that
happen within a single trading day.
$F
1D Chart

Keeping an eye on a daily Line/Level can

show opportunities for long term swings. To
reduce risk, do not enter a long when price
hits Support, wait for a candle to close and
see if buyers are stepping in before entering
the trade yourself.
 PAIRING
STRATEGY
The Pairing Strategy consists of using an indicator
or strategy in pair with another. This is effective in
ticking more boxes than one and helping you
identify a potential trigger and/or stop loss.

$XOM
1D Chart

In this example, $XOM reached a level of

resistance, but simultaneously RSI was higher
than previous times price hit this level. The
following day, price closed below the line with a
large wick to the top, indicating a good
opportunity for a short position.
 TO BE CONTINUED...
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strategies, and that you found the
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For educational purposes only. Nothing within this ebook should be taken as investment advice.