Technical Analysis



Technical analysis is the study of charts with the goal of determining future price actions. While this method may appear straightforward, the obvious question is what types of charts are available?

Chart pattern is a subject to tackle further along, but for the time being, you need to know about support and resistance.

On a chart, we call this resistance. Demand is an area on a chart where buyers are likely going to overwhelm sellers causing the stock to go up. On a chart, we call this support.

Knowing this, it only makes sense to buy at support and sell at resistance!

Stocks run into resistance (supply) because those traders that bought too late and saw the price go down now want to get out at break even so they sell. Stocks find support (demand) because those traders that missed the move up now have a second chance to get in so they buy

Stay away from stocks when you look at their charts, you see a lot of zig zagging.

A good looking chart is below...

Below is an example of bad looking chart...



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