TECHNICAL

ANALYSIS
AND CHART
PATTERNS
COURSE
By Aizad Adam Ahmad

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Outline
1. Charts 12. Head and shoulders
2. Chart Types - Line Charts 13. Double top
3. Chart Types – Bar Chart 14. Double bottom
4. Chart Types – Candlestick Charts 15. Rounding bottom
5. Volume 16. Cup and handle
6. Trendlines 17. Wedges
7. Channels 18. Pennant or flags
8. Chart Analysis : Support 19. Ascending triangle
9. Chart Analysis : Resistance 20. Descending triangle
10. Moving Averages (DMA or WMA) 21. Symmetrical triangle
11. Chart Patterns

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 Charts

• Maps price performance

• Sheds light on supply and demand

• “investment roadmap”

• Price / volume relationship important

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 Chart Types - Line
Charts
• Most basic of all charts

• Just a line that connects the closing prices

over a time frame

• No trading range

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Example of Amazon stock - Line graph

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 Chart Types –
Candlestick Charts
• Vertical line represents the trading range
• Wide bar represents open and close
• White bar – Up and closes above opening
price
• Red Bar – down
• Black bar – up, but closes below the
opening price

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 • Vertical line represents highs/lows of the
day
• Horizontal line represents closing price

Chart Types – Bar Chart • Red = down

• Green = up

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 Volume

• Number of shares that trade hands

between seller and buyers

• Price movements more significant when

volume is above average

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 Trendlines

• Simply put, a line drawn on a chart to

represent the overall trend

• Upward trendline, connecting the lows,

represents support

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 Channels

• Two parallel trend lines that act as areas

of support and resistance (more later)
• Any breakthrough the channel is a break
of the trend, otherwise the price should
stay in range

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 Chart Analysis :
Support
• Price at which BUYERS > SELLERS
consistently.
• Buyers who missed out on the first dip
will be pressured to buy if price continues
to respect the support.

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 Chart Analysis :
Resistance
• Price at which SELLERS overwhelm
BUYERS consistently.
• When a stock makes a new high and then
retraces, sellers who missed out @ the
previous peak will feel pressured to sell
when price climbs back to that level.

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 Moving Averages
(DMA or WMA)
• Most popular are 50-day and 200-day
• Shows the average price of the last #
days and plots it on a line
• Often acts as areas of support and/or
resistance

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 Moving average example – Zoom Inc

Sell Signal Buy Signal Sell Signal

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Moving average envelope - Tesla

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Bollinger bands
• Bollinger Bands® are a trading tool used to determine entry and exit points for a
trade.
• The bands are often used to determine overbought and oversold conditions.
• Using only the bands to trade is a risky strategy since the indicator focuses on
price and volatility, while ignoring a lot of other relevant information.
• Bollinger Bands® are composed of three lines. One of the more common
calculations uses a 20-day simple moving average (SMA) for the middle band. The
upper band is calculated by taking the middle band and adding twice the daily
standard deviation to that amount. The lower band is calculated by taking the
middle band minus two times the daily standard deviation.

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Bollinger Bands – Lucid example

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Chart Patterns

• Patterns are the distinctive formations created by the movements of security

prices on a chart and are the foundation of technical analysis.
• A pattern is identified by a line that connects common price points, such as closing
prices or highs or lows, during a specific period.
• Technical analysts and chartists seek to identify patterns to anticipate the future
direction of a security’s price.
• These patterns can be as simple as trendlines and as complex as double head-and-
shoulders formations.

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 Head and shoulders

• Head and shoulders is a chart pattern in

which a large peak has a slightly smaller
peak on either side of it.

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 Double top

• A double top is another pattern that

traders use to highlight trend reversals.

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Tesla – Head and shoulders example

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 Double bottom

• A double bottom chart pattern indicates a

period of selling, causing an asset’s price
to drop below a level of support.

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 Rounding bottom

• A rounding bottom chart pattern can

signify a continuation or a reversal.

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 Cup and handle

• The cup and handle pattern is a bullish

continuation pattern that is used to show
a period of bearish market sentiment
before the overall trend finally continues
in a bullish motion.

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 Wedges

• Wedges form as an asset’s price

movements tighten between two sloping
trend lines.

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 Pennant or flags

• Pennant patterns, or flags, are created

after an asset experiences a period of
upward movement, followed by a
consolidation.

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 Ascending triangle

• The ascending triangle is a bullish

continuation pattern which signifies the
continuation of an uptrend.

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 Descending triangle

• In contrast, a descending triangle signifies

a bearish continuation of a downtrend.

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 Symmetrical triangle

• The symmetrical triangle pattern can be

either bullish or bearish, depending on
the market.

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 THANK YOU!
You are now an expert on Technical analysis and chart patterns course.

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