Technical Analysis Articles

Online Point & Figure Charting
November 2018
Two websites that offer point & figure charts, along with many other features that those interested in technical analysis will find useful.
The X’s and O’s of Point & Figure Charting
November 2018
These charts focus on significant price movements by using X's and O's to make it easy to identify trend reversals.
Illuminating Trends: An Intro to Japanese Candlestick Charting
August 2002
In order to draw candlestick charts, you must have open, high, low, and close price data. Without open prices, it is impossible to create true candlestick charts.
When Nothing Says Something: Understanding Price Gaps
May 2002
The size of a gap in trading can provide an indication as to future price activity. The wider the gap, the less apt prices are to follow through in the direction of the gap.
Analyzing Volume & Price Ranges Using Equivolume Charting
January 2002
Technical Analysis: While heavy volume on an upward price move is usually viewed as a positive sign, heavy trading volume at the end or top of the price move is ignored. An in-depth look at reading equivolume charts to understand volume and price ranges.
Arms' Ease of Movement: Adding Volume to the Equation
October 2001
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.
Predicting Short-Term Trends: The Cup-With-Handle Pattern
August 2001
Technical Analysis: The cup-with-handle is a bullish continuation pattern that is formed by a corrective movement in price--the handle--which follows an upward trend in prices.
Monitoring the Smart Money by Using On-Balance Volume
May 2001
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.
How to Test and Interpret Trading System Performance
January 2001
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.
Point & Figure Charts Revisited
November 2000
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.
ID'ing When to Buy and Sell Using the Stochastic Oscillator
October 2000
Technical Analysis: Stochastics work best with those securities that are currently rading within a particular range and may prove useful in identifying buying and selling points.
Analyzing Supply and Demand Using Point and Figure Charts
August 2000
Technical Analysis: The usefulness of point and figure charts lies in their ability to filter out short-term price fluctuations that occur during longer, more established trends.
Measuring Internal Strength: Wilder's RSI Indicator
May 2000
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.
The MACD: A Combo of Indicators for the Best of Both Worlds
January 2000
Technical Analysis: The moving average convergence/divergence, better known as the MACD, combines the characteristics of the trend-following moving average with an oscillator, which is more responsive in choppy markets.
Using Moving Averages in a Systematic Trading Strategy
October 1999
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.
An Intro to Moving Averages: Popular Technical Indicators
August 1999
Technical Analysis: In essence, moving averages are "bending trendlines." They are popular because of their relative simplicity and their ability to confirm a trend or announce the reversal of a trend.
Using Triangle Patterns to Determine Price Movement
May 1999
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.
Recognizing Chart Patterns: A Guide to Spotting Price Trends
January 1999
Technical Analysis: The main purpose of using stock charts is to identify trends, and trendlines are one of the simplest tools. How to spot patterns in price charts.
It's Not Too Early for Investors to Get Ready for the January Effect
October 1998
Technical Analysis Column: Although most of the upside action does happen in January, the time to get positioned for the January effect is in October.
Different Perspectives: A Look at Charting Techniques
July 1998
Technical Analysis Column: Bar, point & figure, candlestick, and equivolume are all chart types that can offer different perspectives on a stock's price and volume trends.
A Look at the Patterns for 1997's Winners and Losers
May 1998
Technical Analysis Column: The gains from the top 1997 stock were extraordinary, but the price patterns were generic, showing a long-term decline followed by accumulation.
Separating the Wheat From the Chaff Using Relative Strength
January 1998
Technical Analysis Column: Keeping at least a partial watch on how a stock is acting, regardless of fundamentals, can save investors headaches.
A Look at the Patterns Helps to Differentiate Stock Winners and Losers
October 1997
Technical Analysis Column: Fundamental factors ultimately determine the fate of a stock, but technical analysis can help identify those that are in the process of becoming winners or losers,
Composition Changes Prompt Another Look at the DJ Utilities Average
July 1997
Technical Analysis Column: While not a perfect indicator, the Dow Jones Utilities average has moved lower prior to major market drops. When the utilities are in a sell mode, keep your cards close to your vest.
The Importance of Gaps: It's Where They Fall within a Trend That Counts
May 1997
Technical Analysis Column: The science of gaps--interpreting the significance of price ranges where no transactions take place.
A Time-Honored Approach to Charting: Point & Figure Analysis
January 1997
Technical Analysis Column: Using simple rows of Xs and Os to analyze stock price movement--the basics of point-and-figure charting.
The Same Patterns Remain Even When the Market Index Changes
September 1996
Technical Analysis Column: Speed resistance lines can help identify expected market support and resistance levels. Applying Dow Theory's 1/3-2/3 concept to the Nasdaq composite.
Pattern Analysis: Using Triangles to Spot Trends in Low-Priced Stocks
July 1996
Technical Analysis Column: Analyzing patterns in stock price movement can reveal potential buying and selling opportunities. Using triangles to judge patterns in low-priced stocks.
Everyone Loves a Winner, But Should They? A Look at the "Loser" Approach
May 1996
Technical Analysis Column: Where better to find companies poised for a turnaround than lists of poor-performing stocks? Searching for the next winners among last year's losers.
Back to the Basics: The Fundamentals of Technical Analysis
January 1996
Technical Analysis Column: The foundation of technical analysis rests on the overall trend. A review of the basics.
Deciphering the Trend: It’s All a Matter of Perspective
May 1995
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.
At Hand Once Again: The Season to Consider the January Effect
September 1994
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
July 1994
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.
An Investor’s Roadmap for Finding and Buying Low-Priced Stocks
May 1994
‘Buy low, sell high’ is the time-honored proverb of investing. Investors who wind up ahead of the game have successfully bought low enough often enough, while investors who wind up out of the game have bought high and sold low once too often.
The Market Timing Approach: A Guide to the Various Strategies
May 1994
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
July 1993
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.
Chart Basics Using Bars, Point & Figure and Candlesticks
April 1993
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.
Dow’s Theory and the Averages
January 1993
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 behavior—known as the Dow Theory—that laid the foundation on which much of technical analysis is based today.