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Technical Analysis Articles

Introduction
  • Why Technical Analysis Matters
    Chart watching can help investors make better decisions. A six-step process can take a stock from an idea to a decision to buy or sell.

Chart Types
  • Point & Figure Charts Revisited
    Technical Analysis: Point & figure charts can be tricky to construct. A step-by-step example shows how to plot the X's and O's for one stock over a two-week period.
  • Chart Basics Using Bars, Point & Figure and Candlesticks
    Technical analysis today comes to us under various and sundry names and disguises, ranging from the granddaddy of technical analysis, Dow's theory, to a plethora of more exotic forms. However, in its simplest form, technical analysis is the study of the market action itself.

Pattern Analysis
  • Using Triangle Patterns to Determine Price Movement
    Technical Analysis: Over time, peaks and troughs on a price chart may narrow, forming a triangle pattern of two converging trendlines. How to read triangle patterns for possible clues to future price trends.
  • Deciphering the Trend: It's All a Matter of Perspective
    Nearly every investor has heard of that venerable stock market saw, "The trend is your friend." It makes sense. The trouble is, though, for most investors, deciphering the trend is often an effort in futility. However, it does not have to be so, as trends have identifiable characteristics, patterns that repeat time and time again.

Technical Indicators
  • Arms' Ease of Movement: Adding Volume to the Equation
    Technical Analysis: Equivolume is a method that places price activity and trading volume on an equal footing. Volume analysis is useful in identifying levels of support and resistance as well as points where these levels are broken.
  • Monitoring the Smart Money by Using On-Balance Volume
    Technical Analysis: The OBV tracks the activity of smart money--large traders and investors who have inside details regarding the company's fundamentals--so you can benefit from their information without actually knowing it.
  • Measuring Internal Strength: Wilder's RSI Indicator
    Technical Analysis: Wilder's relative strength index measures a stock's price relative to itself over time. Its popularity lies in its versatility in identifying market extremes and illustrating points of divergence that may signal a reversal of trend.

Technical Analysis & Chart Resources
  • Top Charting Web Sites
    Discover two of the best technical analysis and charting Web sites in this new column.

Additional Articles
  • How to Test and Interpret Trading System Performance
    Technical Analysis: Many forces are at work when you trade a system—commissions, slippage, protective stops, idle interest, margin, and short trading can all influence a trading system's performance results.
  • Using Moving Averages in a Systematic Trading Strategy
    Technical Analysis: The advantage to using moving averages in a trading system is that you will tend to be on the "right" side of the market. However, you will always be entering or exiting positions after the trend has reversed itself.
  • Following the Tracks of the Dow Transports May Give Clues to the Market
    Who cares about the transports? That was the question I was asked in a radio interview on May 17. The producer of the program asked me what topic I would like to discuss, and when I said the Dow Jones transports, the young man was puzzled I chose a topic on which there was so very little interest. The radio producer, needless to say, is not the only observer who has so little regard for the transports.
  • At Hand Once Again: The Season to Consider the January Effect
    With the market approaching the last quarter of the year, one of the most widely discussed anomalies of the stock market, the January effect, is once again fast approaching. While just how useful the January effect is for the individual investor will probably remain hotly debated in some quarters, my own work as well as other studies show that the January effect, if taken in the proper context, is a factor that investors can and should exploit.
  • Technical Clues From An Uncommon Source: The Dow Jones Utilities
    The Dow Jones utilities average is generally not considered one of the basic barometers of the stock market. While the industrials and transports are barometers in that their price action reflects the ebb and flow of future earnings, the regulated growth characteristics of the utilities lessen their significance as an overall barometer of future business activity.
  • The Market Timing Approach: A Guide to the Various Strategies
    Over the past few years the application of market timing by individual investors, as well as registered investment advisers, has accelerated rapidly. Contributing to the growth of timing has been the proliferation of computer capabilities, the availability of data, and the growth of mutual funds.
  • Two Technical Analysis Rules Pass Academic Muster
    Technical analysis has long been looked down upon in many influential circles. Academicians publish countless articles "proving"; that technical analysis lacks merit. Technical analysis has also not been highly thought of by modern Wall Street analysts trained at the leading business schools, and skeptical journalists have not exactly been favorable to technical analysis, either.
  • Dow' s Theory and the Averages
    Charles H. Dow will always hold a unique position in the history of the financial markets. He was one of the preeminent journalists of his day, as co-founder of Dow Jones & Company, and the first editor of The Wall Street Journal and later Barron's. He also devised the first index to measure the trend of the market and penned some basic principles of stock market behavio—known as the Dow Theory—that laid the foundation on which much of technical analysis is based today.