Overview… How to Guide

How to Ease the Stress while InvestingHow to Ease the Stress while Investing

The tools are there but how do I use The tools are there but how do I use them?them?

Trend Trading & Technical AnalysisTrend Trading & Technical AnalysisUsing these tools as confirmationUsing these tools as confirmation

(buy vs sell) (buy vs sell)

Overview…Overview…How to GuideHow to Guide

Moving Averages Moving Averages Fibonacci RetracementsFibonacci RetracementsGann Retracements Gann Retracements Trend LinesTrend LinesDonchian ChannelsDonchian ChannelsBollinger BandsBollinger BandsATR Trailing StopATR Trailing StopDarvas BoxDarvas BoxSupport and ResistanceSupport and Resistance

Combining Technical IndicatorsCombining Technical Indicators

This Presentation is:This Presentation is:

For Educational Purposes OnlyFor Educational Purposes Only

Does Not Give Specific Investing AdviceDoes Not Give Specific Investing Advice

Does Not Recommend any stocks to buy Does Not Recommend any stocks to buy or sellor sell

All Investing has Substantial Risk of Big All Investing has Substantial Risk of Big LossesLosses

Moving Average linesMoving Average linesMoving averages smooth the price data to form a trend Moving averages smooth the price data to form a trend following indicator. They do not predict price direction, but following indicator. They do not predict price direction, but rather define the current direction with a lag. Moving averages rather define the current direction with a lag. Moving averages lag because they are based on past prices. Despite this lag, lag because they are based on past prices. Despite this lag, moving averages help smooth price action and filter out the moving averages help smooth price action and filter out the noise. They also form the building blocks for many other noise. They also form the building blocks for many other technical indicatorstechnical indicators and overlays, such as and overlays, such as Bollinger BandsBollinger Bands, , MACDMACD and and the McClellan Oscillatorthe McClellan Oscillator. The two most popular types of moving . The two most popular types of moving averages are the Simple Moving Average (SMA) and the averages are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA). These moving averages can Exponential Moving Average (EMA). These moving averages can be used to identify the direction of the trend or define potential be used to identify the direction of the trend or define potential support and resistance levels. support and resistance levels. Here's a chart with both an SMA and an EMA on it:Here's a chart with both an SMA and an EMA on it:

Moving Average lines Moving Average lines Daily 10, 21, 34 & 50Daily 10, 21, 34 & 50

10 Day moving average=Strong Up-trend10 Day moving average=Strong Up-trend21 Day moving average=Strong Up-trend 21 Day moving average=Strong Up-trend for the Market (S&P 500, NASDAQ, DOW)for the Market (S&P 500, NASDAQ, DOW)34 Day moving average=Medium Strength 34 Day moving average=Medium Strength Up-trend for stocks (early sell signal, any Up-trend for stocks (early sell signal, any close below the 34 DMA)close below the 34 DMA)50 Day moving average=Week Up-trend 50 Day moving average=Week Up-trend for stocks (late sell signal, any close below for stocks (late sell signal, any close below the 50 DMA)the 50 DMA)

When to hold a big winner…. When to hold a big winner…. Early sellEarly sell 10 Day 10 Day violation vs violation vs Later sellLater sell 50 Day moving average, 50 Day moving average,

7 Week Rule7 Week Rule

Trade like an O’Neil DiscipleTrade like an O’Neil Disciple: : Seven Week RuleSeven Week Rule: : Stocks that have a tendency to “obey” or “respect” Stocks that have a tendency to “obey” or “respect” the 10-day moving average for at least seven the 10-day moving average for at least seven weeks in an uptrend should often be sold once the weeks in an uptrend should often be sold once the stock violates the 10-day line. If they don’t show stock violates the 10-day line. If they don’t show such tendency, then it is better to use the 50-day such tendency, then it is better to use the 50-day moving average as your guide for selling.moving average as your guide for selling.Violation= closes below 10 day moving average Violation= closes below 10 day moving average and then trades below the low of that day.and then trades below the low of that day.

Early Sell..

Sell all or some,

maybe 40-50%

When to sell using the 50 DMAWhen to sell using the 50 DMA

Gaps down/through the 50 day/10wkGaps down/through the 50 day/10wk

Closes 6% below the 50 dayCloses 6% below the 50 day

On the weekly chart, closes below the 50 On the weekly chart, closes below the 50 day on 30% above average volumeday on 30% above average volume

Fibonacci RetracementFibonacci RetracementA term used in technical analysis that refers to areas of A term used in technical analysis that refers to areas of support (price stops going lower) or resistance (price support (price stops going lower) or resistance (price stops going higher). The stops going higher). The Fibonacci retracementFibonacci retracement is the is the potential retracement of a financial asset's original move potential retracement of a financial asset's original move in price. Fibonacci retracements use horizontal lines to in price. Fibonacci retracements use horizontal lines to indicate areas of support or resistance at the key indicate areas of support or resistance at the key Fibonacci levels before it continues in the original Fibonacci levels before it continues in the original direction. These levels are created by drawing a direction. These levels are created by drawing a trendline between two extreme points and then dividing trendline between two extreme points and then dividing the vertical distance by the key Fibonacci ratios of the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.23.6%, 38.2%, 50%, 61.8% and 100%.

Fibonacci RetracementsFibonacci RetracementsGolden Numbers Golden Numbers

61.8%, 50%, 38.2%61.8%, 50%, 38.2%

Dead Cat Bounce used in conjunction with Dead Cat Bounce used in conjunction with Fibonacci RetracementsFibonacci Retracements

Definition of 'Dead Cat Bounce'Definition of 'Dead Cat Bounce'A temporary recovery from a prolonged decline or A temporary recovery from a prolonged decline or bear marketbear market , followed by the continuation of the , followed by the continuation of the downtrend. A dead cat bounce is a small, short-lived downtrend. A dead cat bounce is a small, short-lived recovery in the price of a declining security, such as a recovery in the price of a declining security, such as a stock. Frequently, downtrends are interrupted by brief stock. Frequently, downtrends are interrupted by brief periods of recovery - or small rallies - where prices periods of recovery - or small rallies - where prices temporarily rise. This can be a result of traders or temporarily rise. This can be a result of traders or investors closing out short positions or buying on the investors closing out short positions or buying on the assumption that the security has reached a bottom. A assumption that the security has reached a bottom. A dead cat bounce is a price pattern that is usually dead cat bounce is a price pattern that is usually identified in hindsight. Analysts may attempt to predict identified in hindsight. Analysts may attempt to predict that the recovery will be only temporary by using certain that the recovery will be only temporary by using certain technical and fundamental analysis tools. technical and fundamental analysis tools.

Fibonacci Retracement: When the stock hits 100%, then retraces to one of the Golden Numbers (38.2%, 50.0% or 61.8%) it’s like a rubber-band being pulled down, then shooting back up. The Target Zone is 5 to 6 steps higher. This method only works during an uptrend. Be cautious when the market is in a correction.

Retrace 38.2%

Target Zone

Gann RetracementsGann RetracementsAnother way to determine the support and Another way to determine the support and resistance is to combine angles and horizontal resistance is to combine angles and horizontal lines. For example, often a downtrending Gann lines. For example, often a downtrending Gann angle will cross a 50% retracement level. This angle will cross a 50% retracement level. This combination will then set up a key resistance combination will then set up a key resistance point. The same can be said for uptrending point. The same can be said for uptrending angles crossing a 50% level. This area becomes angles crossing a 50% level. This area becomes a key support point. If you have a long-term a key support point. If you have a long-term chart, you will sometimes see many angles chart, you will sometimes see many angles clustering at or near the same price. These are clustering at or near the same price. These are called price clusters. The more angles clustering called price clusters. The more angles clustering in a zone, the more important the support or in a zone, the more important the support or resistance. resistance.

Gann RetracementsGann Retracements50%, 25%, 12.5%, 6.25%50%, 25%, 12.5%, 6.25%

Trend LinesTrend Lines

Technical analysis is built on the assumption Technical analysis is built on the assumption that prices Trend. Trend lines are an important that prices Trend. Trend lines are an important tool in tool in technical analysis fortechnical analysis for both identification both identification and confirmation. A Trend line is a straight line and confirmation. A Trend line is a straight line that connects two or more price points and then that connects two or more price points and then extends into the future to act as a line of support extends into the future to act as a line of support or resistance. Many of the principles applicable or resistance. Many of the principles applicable to support and resistance levels can be applied to support and resistance levels can be applied to trend lines as well. It is important that you to trend lines as well. It is important that you understand all of the concepts presented in our understand all of the concepts presented in our Support and Resistance articleSupport and Resistance article before you before you continuecontinue. .

Trend Lines/Support & Trend Lines/Support & Resistance/Chart PatternsResistance/Chart Patterns