Technical analysis II

1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  16  17  18  19  20  21  22   

1. Average share prices

Moving averages are one of the oldest and most popular technical analysis tools, particularly amongst smaller investors.

A simple moving average is calculated by adding together the closing prices of a share (or index) over a certain number of time periods and then dividing the sum by the number of periods involved.

So, for example, the seven day average for a share price would be calculated by taking seven days worth of data, adding them together and dividing by seven.

The total of the share prices is 1932. Divide 1932 by 7 and you get 276. That's the average price over the 7 days.

But a simple average by itself doesn't tell you enough about the general trend of the share price. For that you need a moving average.

1. Average share prices 2. Moving averages 3. Weighted moving averages 4. Where to plot moving averages 5. Interpreting moving averages - the basics 6. Classic interpretation of moving averages 7. Combining short and long term moving averages 8. Moving average convergence/divergence (MACD) 9. Reversal patterns 10. Head and shoulders top 11. Head and shoulders bottom 12. Double top 13. Double bottom 14. Rounding tops and bottoms 15. Broadening formations 16. Wedge formations 17. The momentum indicator 18. The momentum oscillator 19. Rate of change indicator 20. Price minus average 21. Relative strength indicator 22. Conclusion

• Martin Pring's Introduction to Technical Analysis
• Technical Analysis Plain and Simple
• Technical Analysis of the Financial Markets
• Technical Analysis