Technical Analysis

bearish breakout

a decline through the support level

resistance level

a price level above which it is supposedly unlikely for a stock or stock index to rise

support level

a price level below which it is supposedly unlikely for a stock or stock index to fall

technical analysis

Research into the demand and supply for securities, based on trading volume and price studies. Technical analysts use charts to identify and project price trends. Unlike FUNDAMENTAL ANALYSIS, technical analysis is not concerned with the financial position of a company.

trendlines

The bigger and faster the Countertrend move, the more likely that a reversal will occur after the market comes back to test the trend's extreme.

fundamental analysis

A method of evaluating a stock by attempting to measure its intrinsic value. Fundamental analysts study everything from the overall economy and industry conditions, to the financial condition and management of companies

bullish breakout

A rise through the resistance level

Dow theory

A theory of market analysis based on the performance of the Dow Jones industrial and Transportation stock price averages. The theory states that the market is in a basic upward trend if one of these averages advances above a previous important high, accompanied or followed by a similar advance in the other average. When the averages both dip below previous important lows, this is regarded as a confirmation of a downward trend.

Odd-lot theory

An investment strategy that assumes that the small investor is always wrong. Using odd-lot buying and selling patterns as indicators of small investor activity, this theory maintains that one should buy as odd-lot selling increases and vice versa

Short interest theory

How many open short sales are out there. A large number of open short positions is a bullish indicator.

head and shoulders pattern

Suggests that demand drove the uptrend but it is fading

consolidating

if a stock stays within a narrow range it is said to be________.

reversal

indicates that an upward or downward trendline has halted and the stocks price is moving in the opposite direction

Modern Portfolio theory

portfolios should be constructed by looking at the investments as a whole and how they perform in accordance with one another rather that basing the investments on their own merits

trend

stock prices tend to ________ or move together

market trading volume

substantially above normal signifies or confirms a pattern in the direction of prices; if overall volume has been listless for months and suddenly jumps significantly, a technical analyst views that as the beginning of a trend

market breadth

the number of issues closing up or down on a specified day

random walk theory

theory that there are no predictable trends in securities prices that can be used to get rich quick

efficient market theory

which holds that the stock market is perfectly efficient, with prices reflecting all known information at any given time; it is impossible therefor, to beat the market using fundamental or technical analysis