Technical Analysis www.eddfin.co.in

Advance applied course on Technical Analysis: 

Advance applied course on Technical Analysis Created by:

Demo Module : 

Demo Module This is a demo module and does not contain all the topics We have selected some topics from ALL the chapters and compiled in this demo module Happy Learning ! www.eddfin.co.in

Preface : 

Preface This module is designed specially for all those aspirants who wish to learn the PRACTICAL dynamics of the Technical Analytics in Financial Markets We have tried to make this module on a very practical approach so the students learn the most practical tactics of this study and apply directly in their practice Traders. Investors, Students, Sub Brokers, Professional, RM, Dealer, Branch manager, housewives or anybody who wishes to learn the Technical Analysis can take this course up Further details visit: www.eddfin.co.in Best of Luck !

Topics Covered : 

Topics Covered Basics of Technical Analysis Trend Analysis Dow Theory Technical Pattern Identification and Analysis Technical Indicators Fibonacci Retracement Elliot Wave Analysis Advance Candlestick Pattern Applying Technical Analysis

Chapter 1- Basics of Technical Analysis : 

Chapter 1- Basics of Technical Analysis This chapter will guide you through the basics of Market Dynamics, Technical analysis, Time period, types of chart and their formation Topics Covered: Why Analysis Market Dynamics Trading Mechanism Technical Analysis Basics Technical Charting Price and Volume Panel Chart Time period Types of Charts- Line chart, Bar Chart and Candlestick Charts

Why Analysis : 

Why Analysis Markets are full of uncertainty, but trends don’t lie, Analysis helps the trader take an informed decision enabling him to put up proper trading STOP LOSSES and reasonable TARGETS

Technical Analysis: 

Technical Analysis Technical Analysis is the art and science of predicting future trends and price movements of a share using Technical Tools and trend analysis Software used: Meta stock, Falcon, IRIS, Advance get, getqoute, tickerplant. Technical Analysis in practice

PowerPoint Presentation: 

A Technical chart

PowerPoint Presentation: 

Volume panel Daily volume stick Stock price panel

Types of Charts : 

Types of Charts Technical charts are represented in different formats as per the analysis needs and depth, we would be covering 3 most commonly used chart types here Line Chart Bar/ OHLC Chart Candlestick Chart These charts can be used on a minute/daily/ weekly/ monthly/ year time periods

Candle stick Chart : 

Candle stick Chart Introduction: Another more popular form of Chart used is a Candle stick chart pattern, as the name suggest each price tick is in a form of Candle, similar to the Bar chart this also represents open, high, low and close for the underlying, candlestick charts were developed back in 18 th Century by a Japanese rice trader Homma Munehisa . Formation: A candle stick can be divided in 2 parts the Real body is the trading range between open and close and the outer body/ shadow are the upper and lower wicks which represent the high and lows of the candle stick Candle colour : If the close is above the open, candle would form in green/ white colour , conversely the candle would form of a black/red colour

Usefulness and Limitation of a Candlestick chart: 

Usefulness and Limitation of a Candlestick chart Usefulness: Candlestick chart are more visibly indicative due the colour and shape patterns in them, helping an analyst pick up trends early. Different kind of Candlestick patterns like Doji , hammer, dragonfly etc helps the analysts in predicting trends Limitations: Too filled up chart sometimes makes it difficult to spot minute observations Not easy for a beginner to understand candlestick chart patterns

Candle stick Formation : 

Candle stick Formation As shown above a candle stick can be either drawn in a Green and Red colour Format and Also in a Black and white format Bullish candle Bullish candle Bearish candle Bearish candle

PowerPoint Presentation: 

A Candlestick chart Close lower than open Close higher than open

Chapter 2- Trend Analysis: 

Chapter 2- Trend Analysis It is said that Trend analysis is the most important and practically most perfect way of Technically analysing the Stocks, this chapter will guide you on Trend formation, types of trends, Trendline and their types and their practical use while technical Analysis Topics covered : Analysing Trends Trend formation- Peak and troughs Types of Trends- Rising, Falling, Stable, Volatile Support and Resistance formation Trendlines and its formation Generating Buy/Sell signals through Trendlines Horizontal and Angular Trendline Main and short/ Medium Term Trendline Trendchannel

Support: 

Support A point where 2 troughs are formed at almost equal price point and gives support to the stock by restricting the fall is known as a support point Joining of 2 troughs

Drawing Resistance Trendline: 

Drawing Resistance Trendline Peaks Resistance Trendline formed by joining Peaks

Trend channel: 

Trend channel Support line Resistance line Trading range

Short term trend channel : 

Short term trend channel

Chapter 3 - Dow Theory : 

Chapter 3 - Dow Theory Chales H Dow, also known as the Father of Technical Analysis formulated 6 major founding rules in Technical analysis to help an Analyst apply Technical Analysis to trading strategies Stocks have 3 major trends- Primary, secondary, minor Stocks move in three phases- Accumulation, Public participation, distribution Markets discount every relevant news Market averages must confirm each other Volume must support a the trend Trends exists untill decisive indications

I. Stocks move in 3 trends : 

I. Stocks move in 3 trends Primary Trend Secondary Trend Minor Trend

IV. Market Averages/ Indexes must confirm each other: 

IV. Market Averages/ Indexes must confirm each other Bank nifty constitutes 26% of nifty Both confirming each other

VI. Trends exists untill decisive Indications : 

VI. Trends exists untill decisive Indications Dow believed that trends existed despite "market noise". Markets might temporarily move in the direction opposite to the trend, but they will soon resume the prior move. The trend should be given the benefit of the doubt during these reversals. Determining whether a reversal is the start of a new trend or a temporary movement in the current trend is not easy. Technical analysis tools can be used to identify a trend Reversal

Chapter4- Technical Patterns : 

Chapter4- Technical Patterns Stocks move in a pattern which symbolises the inherent Bullish or Bearish strength in the stock Technicians have evolved with many Technical patterns in the stocks and have tried to anlayse and predict the future trend of the stocks. We would be covering the following most widely used Technical patterns Double Top and Bottom Triple Top and Bottom Ascending and Descending Triangles Symmetrical Triangles Head and Shoulder Inverted Head and shoulder Rising and Falling Wedge Rounding Top and Bottom Flag and pennant

Double Top Formation : 

Double Top Formation Introduction: The double top is a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in-between. Double Top: A technical pattern where 2 tops are formed at a similar place indicating a major resistance area. The pattern can be formed in an intra/ EOD/ Weekly/ Monthly or yearly chart Pattern Identification Tops: There are 2 tops at almost identical place Trough/ Neckline: A trough is formed after the first peak is formed 2 nd Top : The 2 nd top is formed post the trough formation Decline from 2 nd peak: The stock falls generally with huge volumes and gaps Trough breakdown: The stock breaks the Trough/ Support Price target: The stock falls almost equal to the distance from trough to the peaks

Double Top Formation : 

Double Top Formation 1 2 Neckline Two tops at the same level Sell when stock falls below neckline

PowerPoint Presentation: 

1 2 Neckline Sell signal The fall from the Neckline Should be almost equal to Distance from peak to neckline

Head and shoulder: 

Head and shoulder This is a very widely seen Technical Pattern which divides the stock into 3 quadrants namely Left shoulder, Head and Right shoulder Sell

Head and shoulder: 

Head and shoulder Generally the stock falls equivalent distance as the Head to the neckline here in 57 points

SELL signal via Symmetrical Triangle : 

SELL signal via Symmetrical Triangle SELL as stock broke the support line Triangle

Rising Wedge: 

Rising Wedge Support line breakdown Rising lows Rising highs

Chapter 5- Technical Indicators : 

Chapter 5- Technical Indicators There are numerous Technical Indicators developed by Market Technicians used in Security Analysis, these Indicators are developed using mathematical set of formulas and back tested on different securities Technical Indicators analyse the stock trend on the basis of available trading data on the securities. We would be discussing following Technical Indicators in this chapter Accumulation/ Distribution line ADX( Average Directional Index) Bollinger Band Commodity Channel index MACD- Moving Average Convergence Divergence Money flow Index Moving Average- Simple, Exponential Relative Strength Index Stochastic Oscillator

Accumulation/ Distribution Line : 

Accumulation/ Distribution Line The Accumulation/Distribution Line was developed by Marc Chaikin to assess the cumulative flow of money into and out of a security. In order to fully appreciate the methodology behind the Accumulation/Distribution Line, it may be helpful to examine one of the earliest volume indicators and see how it compares. Accumulation - A trading phenomenon where buyers overtake sellers and start cornering or accumulating the stocks, as a result the prices of the stocks goes up. Distribution- When the market becomes bearish on the stock and sells the stock in the market, and sellers outnumber the buyers in turn making the stock fall down. BUY/ SELL A trendline is drawn to ascertain whether the stock is into an accumulation/ distribution mode. A break above the Trendline on A/D line shows Accumulation( BUY SIGNAL) and a break down shows a Distribution( SELL SIGNAL)

Using Accumulation/ Distribution line: 

Using Accumulation/ Distribution line A trendline is used to ascertain accumulation/ Distribution on the counter A break down From trendline Indicates distribution

A/D line used to infer strength : 

A/D line used to infer strength Stock is falling but A/D line is rising Showing strength In the stock The stock starts rising

+DI and –DI Crossovers : 

+DI and –DI Crossovers +DI crosses above –DI, bullish sign -DI crosses above +DI Bearish sign

Using ADX, +DI and –DI together : 

Using ADX, +DI and –DI together Stock starts to fall ADX rises denotes new trend emerging -DI crosses above +DI Indicating Bearishness

Stochastic Oscillator: 

Stochastic Oscillator Developed by George C. Lane in the late 1950s, the Stochastic Oscillator is a momentum indicator that shows the location of the close relative to the high-low range over a set number of periods Calculation: %K = (Current Close - Lowest Low)/(Highest High - Lowest Low) * 100 %D = 3-day SMA of %K The default setting for %K is 14 period and %D is a 3DMA of %K The indicator moves between 0-100

Using stochastic oscillator : 

Using stochastic oscillator Stochastic oscillator is best used for momentum traders as it gauges the momentum more rather than the price tendency Overbought: When the indicator moves above 80 mark level Oversold: When the indicator moves below 20 mark level BUY: When %K moves above 20 mark and breaks above the % D line SELL: When % D moves below 80 mark and breaks below the %D line

Use of Stochastic Oscillator: 

Use of Stochastic Oscillator %K below %D and break below 80 %K above %D and break above 20

Elliot wave in practice: 

Elliot wave in practice Elliot wave formation in Reliance Industries

Chapter 8- Advance Candlestick Patterns : 

Chapter 8- Advance Candlestick Patterns Candlestick patterns can help you guide in ascertaining the market directions in a big way. Although in practical analytics only candlestick patterns alone cannot be used to fully predict a trend, it should be used with a pair of relevant indicators. Lets see some of the Advance candlestick patterns Abandoned Baby: A rare reversal pattern characterized by a gap followed by a Doji, which is then followed by another gap in the opposite direction. The shadows on the Doji must completely gap below or above the shadows of the first and third day. Dark Cloud Cover: Bearish reversal pattern that continues the uptrend with a long white body. The next day opens at a new high then closes below the midpoint of the body of the first day.

Chapter 9 – Applying Technical Analysis: 

Chapter 9 – Applying Technical Analysis This is the most important chapter of the Module, this teaches the aspirant on how to practically use Technical Analysis in practice. It contains a collection of our Real time research work which are regularly published in our Newsletters We would like to share the few practical things while generating a Technical call Always use Trendlines to predict the flow of the trend Use moving averages depending on the time frame the call is generated Use atleast 3 parameters before generating a Technical Call for a triple confirmation Volumes are always handy and can give you a double confirmation on your calls

Head and shoulder breakdown with 14 DMA break for SELL: 

Head and shoulder breakdown with 14 DMA break for SELL 14 DMA

Use of Fibonacci in RSI, Stochastic and Rounding Bottom generating BUY signal: 

Use of Fibonacci in RSI, Stochastic and Rounding Bottom generating BUY signal

Hammer Formation : 

Hammer Formation

Demo Module : 

Demo Module This was just a demo module and does not contain all the topics We have selected some topics from ALL the chapters and compiled in this demo module For complete course details refer: http://www.eddfin.co.in/technical-analysis-course.html Happy Learning ! www.eddfin.co.in

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Our Services We are a fully integrated Financial Market training and research solutions company provided result oriented & Practical Training in Financial Market domain Financial Market courses Research Services Financial Market training for Students Corporate Training for Stock Broking Companies Details visit: www.eddfin.co.in

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