Technical Analysis

Chapter 7

Technical AnalysisTechnical analysis is based on the examination of historical price data in order to forecast future prices.This data is used to form charts in order to analyze trends in both long term and short term periods. Using different charting techniques, buying and selling opportunities can be identified and capitalized upon. The longer the trend, the more reliable it is considered.

8-2

Assumption1. Market

rates include all data. All prices included in charts are a result of all of the factors in the marketplace, including economic, political or technological. Therefore studying the price chart gives a clear picture of how stocks behave over time, given the different elements that affect them. 2. Price trends move in one direction. This assumption serves the basis for the trend analysis and is the heart of the whole technical analysis.

8-3

K-line(k线图) K线又称日本线，据说起源于200年前的日本， 是日本古代市场计算米价每日涨跌所使用的分 析方法，后来才应用到股票市场上。 K线就是将买卖双方实战结果即买方和卖方力 量的增减和转化过程，用图形表示出来。因为 K线表示买卖双方的实战结果，故又称阴阳线 或红黑线，取阴阳相对，红黑相反之意。

一条K线记录的是某一种股票一天价格变动的 情况。如果把每天的K线按时间顺序排列在一 起，就构成了这个股票上市以来每天价格变动 的K线图，看起来一目了然。8-4

8-5

大阳线

大阴线

8-6

8-7

如何运用K线来预测行情可以根据单独一根K线的形状大致判断当日股 市的变化 ，为了更准确地预测行情，我们常 常要对相连的几根K线进行分析。无论是两根K 线还是三根或是更多K线的组合，都是以相连 的两根K线相对位置的高低和阴阳来考察。 将相连两天的K线画出，第二天相对于第一天K 线位置的高低就是行情判断的基础。即在两日 K线的比较中，呈现出从高处到低处的变化时 表明多方力量的减少、空方力量增加的过程， 反之亦然。下面具体介绍有代表性的几种情况：8-8

8-9

Trend 趋势Trend - is a set tendency in changing the price level limited by a certain time interval. Trend is simply, the overall direction prices are moving, UP, DOWN, OR FLAT. Dow theory(道式理论),Elliott wave theory (艾略特波浪理论), and the theory of Kondratieff waves(康得拉耶夫理论)

8-10

Dow theory(道氏理论)Charles Dow (who established the Wall Street Journal), is the grandfather of most technical analysis. The Dow theory posits three force simultaneously affecting stock prices. The primary trendSecondary or intermediate trends Tertiary or minor trends

8-11

Three major kinds of trendsThe primary trend is the long-term movement of price, lasting from severalmonths to several years.It reflects investor’

s analysis of the internal economic processes that form the basis of the business activity cycle. According to statistics, the business activity cycle from trough to trough lasts about 3-6 years. Hence, the rising or falling trend lasts from 1 to 2 years. A Bull market usually lasts longer than a bear market (since it is easier to break than to build).

8-12

Three major kinds of trendsSecondary or intermediate trends are caused by short-term deviations of prices from the underlying trend line. Lasting from several(three) weeks to several(six) months.Prices do not move in a straight line and the movement in the main direction of the primary trend is interrupted by certain retracements. Trends which are in antiphase to the primary trend are called intermediate (medium-term) changes in prices.

Tertiary or minor trends are daily fluctuation of little importance. Short-term trends that last from 1 to 3-4 weeks8-13

8-14

下降趋势

8-15

Trend Line 趋势线The basic trendline is one of the simplest technical tools employed by the trader, and is also one of the most valuable in any type of technical trading. Up trendline(上升趋势线), bullish trendlineFor an up trendline to be drawn, there must be at least two low points in the graph where the 2nd low point is higher than the first. A price low is the lowest price reached during a counter trend move.

Down trendline(上升趋势线), bearish trendline

8-16

8-17

8-18

Support linePrice supports are price areas where traders find that it is difficult for market prices to penetrate lower.Buying interest is strong enough to overcome Selling interest keeping prices at a sustained level.

Support line(支撑线):无论是在上升趋 势或下降趋势中把两个以上的低点连接 成一条直线，称为股价的支撑线。

8-19

8-20

Resistance lineResistance is the opposite of support and represents a price level where Selling Interest overcomes Buying interest and advancing prices are turning back. Resistance line(压力线):把两个以上的 高点连接成一条直线，称为股价的压力 线。

8-21