Technical Analysis of STOCKS & COMMODITIES
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Article Archive For Stuart Evens
DownloadStochastics by Stuart Evens
ARTICLE SYNOPSIS ...Stochastics As originally introduced by George Lane, the classic stochastic oscillator is not a normalized relative strength indicator, like most other momentum oscillators. However, it does use closing price in its calculation, but in a way slightly different from other oscillators. Here's a refresher for the veteran traders and an introduction for the novices. The stochastics oscillator was originally introduced by George C. Lane in STOCKS & COMMODITIES in 1984. Since then, it has become a popular indicator, included in most technical analysis software programs. That, combined with the wid...
On-Balance Volume by Stuart Evens
ARTICLE SYNOPSIS ...On-Balance Volume by Stuart Evens What do technicians look at in order to qualify the significance of a trend? One key element is volume, in that high volume in a trend indicates that large players may be involved. The theory goes that large traders are better informed, so the trend is likely to continue. How can you track volume? Does a volume-based indicator help the analyst and trader? Take a look. One of the better-known technical indicators to track volume is the on-balance volume (OBV). The OBV line is simply a running sum calculated by adding or subtracting the security's daily volume...
Bollinger Bands by Stuart Evens
ARTICLE SYNOPSIS ...Bollinger Bands by Stuart P. Evens This indicator combines popular technical methods -- moving averages, support/resistance, and envelopes -- with statistical analysis to create a powerful technical analysis tool. Bollinger Bands, used in combination with the relative strength index (RSI) to analyze a market, enables us to develop a method to enter and exit trades and review the historical results. On a day-to-day basis, markets trade in a volatile fashion around the trend. To better see the trend, traders use moving averages to filter the price action. This way, traders can gather important ...
Momentum by Stuart Evens
ARTICLE SYNOPSIS ...Momentum Trend-following methods and indicators have drawbacks: One, they indicate a change in trend after the fact, thereby missing a significant portion of the initial move. Two, markets spend a lot of time not in trends, but in trading ranges -- and using trend-following methods with prices in trading ranges can result in whipsaw losses. To avoid these pitfalls, momentum indicators are used to forewarn of a change in trend and the reversal of price at support and resistance levels within a trading range. Momentum is not a perfect method or indicator, but used appropriately, it can be extrem...
Support And Resistance by Stuart Evens
ARTICLE SYNOPSIS ...Support And Resistance by Stuart Evens Support and resistance are basic tools used by traders to identify key reversal areas. Here's a look at the basics of support and resistance levels and how to determine which levels might be important in the future. One premise of technical analysis is that stock prices are affected by support and resistance. As those terms imply, support acts to keep a stock's price above a certain level, while resistance acts to keep a stock's price below a certain level. In fact, once it has been determined that a price has acted as important support or resistance i...
Triangles: Reversal Or Continuation by Stuart Evens
ARTICLE SYNOPSIS ...Triangles: Reversal Or Continuation by Stuart Evens Look at most any book on the subject of technical analysis, and you'll come across triangles. These formations are usually one of the first chart patterns that novice technicians study, and it deserves some examination. Triangles are classified as reversal patterns in some reference works, while they are described as continuation patterns in others. Robert Edwards and John Magee, in their Technical Analysis Of Stock Trends, have a chapter titled "Important Reversal Patterns -- The Triangles." John Murphy, on the other hand, in his Technical...
Directional Movement by Stuart Evens
ARTICLE SYNOPSIS ...Directional Movement by Stuart Evens There's no way around it: Traders trade the trend, be it short term or long term. It follows, then, that there is a need to identify when a market is trending. Here's J. Welles Wilder's directional movement, a set of technical indicators designed to recognize trending markets. Most technical trading methods can be categorized into one of two types: Trend-following, which involves taking trades with the trend, or range trading, which involves looking for reversal points in a trading range. Traders need to determine if the stock they are trading is trendin...
Keltner Channel by Stuart Evens
Momentum And Relative Strength Index by Stuart Evens
ARTICLE SYNOPSIS ...Momentum And Relative Strength Index Last month, we examined the theory of price momentum. This time, we'll look at two common and popular indicators based on this theory, and how they can be used to enter and exit a market. ""Momentum oscillator" is a generic term used to refer to many different indicators, two of which are the relative strength index (RSI) and momentum indicators. Since J. Welles Wilder presented price momentum and the RSI in his classic New Concepts In Trading Systems, both indicators have become popular technical tools, and a discussion of each can be found in most curre...
Plotting Trendlines by Stuart Evens
ARTICLE SYNOPSIS ...Drawing trendlines may seem simple, but there is a right way and a wrong way to plotting trendlines. With so many different indicators, oscillators, and moving averages making up the science of technical analysis, it is easy to forget about the basics. One basic rule of most trading strategies is to always trade with the trend, and it follows that early recognition of a change in trend would be important. Therefore, it is imperative that we apply techniques to determine what the initial trend is so that we can either trade with it or be in a position to recognize when it has, in fact, change...
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