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Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
Technical analysis
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Technical analysis

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  • 1. TECHNICAL ANALYSIS“MOMENTUM”<br />Presented By:<br />BSE 12<br />
  • 2. Momentum<br />Momentum is a simple technical analysis indicators showing the difference between current price &amp; earlier price.<br />When the Momentum indicator crosses above the zero line, it is a bullish signal.<br />When the Momentum indicator crosses below the zero line, it is a bearish signal.<br />
  • 3. Bullish Signal<br />Bearish <br /> Signal<br />
  • 4. Momentum Indicators <br />Moving Average<br />Moving Average Convergence Divergence (MACD)<br />Rate of Change (ROC)<br />Relative Strength Index (RSI) <br />Stochastic oscillators<br />Williams %R<br />
  • 5. Moving Average<br />The two most popular types of moving averages are:<br />The Simple Moving Average (SMA) - the average (mean) price of a security over a specified number of periods;<br />The Exponential Moving Average (EMA)applies to weighing factors to reduce the lag in simple moving averages.<br />
  • 6. Bullish<br />Bearish<br />
  • 7. Bullish <br />Bearish<br />Double bottoms<br />
  • 8. Moving Average Convergence &amp; Divergence (MACD)<br />MACD was developed by Gerald Appel as a way to keep track of a moving average crossover system.<br />MACD is the difference between a 12-day and 26-day moving average. A 9-day moving average of this difference is used to generate signals.<br />When this signal line goes from negative to positive, a buy signal is generated.<br />When the signal line goes from positive to negative, a sell signal is generated.<br />
  • 9.
  • 10. Buy Signal<br />Sell Signal<br />
  • 11. Rate of Change (ROC)<br />The Rate of Change (ROC) is a simple technical indicator that shows the percentage difference between the current price and the price n periods ago.<br />Rate of Change (ROC) = Current Price - Earlier Price ──────────────── X100<br /> Earlier Price<br />The higher ROC is considered a more overbought security and the lower ROC is a more oversold security.<br />
  • 12.
  • 13. Handle<br />Cup<br />Overbought<br />Oversold<br />
  • 14. Relative Strength Index (RSI)<br />RSI was developed by Welles Wilder as an oscillator to gauge overbought/oversold levels.<br />It compares the stock&apos;s gains over its losses over a specific period of time, usually 14 trading days<br />To calculate<br />Sum the negative changes and positive changes and divide each by 14 to create (D) down average and (U) up average<br />RSI=U/(U+D) * 100<br />If RSI &gt; 70<br />Market is thought to be over bought, &amp;<br />If RSI &lt; 30<br />Market is thought to be over sold<br />
  • 15. Oversold<br />
  • 16. Bullish<br />Bearish<br />Overbought<br />Oversold<br />
  • 17. Stochastic Oscillator<br />The Stochastic Oscillator was developed by George Lane in the 1950s. <br />The Stochastic Oscillator is based upon the theory that prices move in waves, moving back and forth between an overbought level and an oversold level (even within strong trends). <br />The Stochastic Oscillator is usually displayed as a stochastic line, and a signal line which is a moving average of the stochastic line.<br />Stochastic Oscillator (%K) = Close Price - Lowest Low ─────────────── x 100 Highest High - Lowest Low<br />
  • 18. Handle<br />Cups<br />
  • 19. Williams %R<br />Williams %R was developed by Larry Williams to indicate overbought and oversold levels. <br />The indicator is very similar to Stochastic %K.<br />%R varies from 0 to -100, while %K varies from 0 to 100<br />Values between (0 and -20) are considered to indicate an overbought condition, whereas readings in the (-80 and -100) range indicate an oversold condition<br />Williams %R = Highest High – Close Price ──────────────── x 100 Highest High – Lowest Low<br />
  • 20.
  • 21. Oversold<br />Overbought<br />
  • 22. Triple Exponential Average Indicator (TRIX)<br />TRIX was developed by Jack Huton.<br />The TRIX is a momentum indicator, that is displayed as an oscillator above and below a zero line. <br />A positive TRIX value indicates an overbought condition, whereas a negative value indicates an oversold market. <br />A positive value would suggest that momentum is increasing while a negative value would suggest that momentum is decreasing.<br />
  • 23. Overbought<br />Oversold<br />
  • 24. Head<br />Left shoulder<br />Right shoulder<br />Neckline<br />Overbought<br />Oversold<br />

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