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Technical Analysis

Trends, support and resistance, volume and the common indicators.

• ADX (Average Directional Index)An indicator of how strong a trend is, not which way it points.
• ATR (Average True Range)The average size of a price's daily range, used to measure volatility.
• Bear trapA drop below support that quickly reverses, catching sellers and short sellers on the wrong side.
• Bollinger BandsA moving average with bands drawn two standard deviations above and below it.
• BreakoutA move through a support or resistance level that had held before.
• Bull trapA rise above resistance that quickly reverses, catching buyers on the wrong side.
• ChannelTwo parallel trendlines that contain price as it rises, falls or moves sideways.
• ConsolidationA period where price moves sideways in a narrowing or steady range.
• Dead cat bounceA brief rally inside a downtrend that fails before the decline continues.
• Death crossWhen the 50-day moving average falls below the 200-day moving average.
• DivergenceWhen price and an indicator move in opposite directions.
• DowntrendA series of lower highs and lower lows.
• EMA (Exponential Moving Average)A moving average that gives more weight to recent prices.
• False breakout (fakeout)A move through a level that fails and returns back inside the range.
• GapA price jump that leaves an empty space on the chart between one session and the next.
• Golden crossWhen the 50-day moving average rises above the 200-day moving average.
• Higher highs and higher lowsThe pattern of an uptrend: each rally peaks higher and each pullback bottoms higher.
• Lower highs and lower lowsThe pattern of a downtrend: each rally peaks lower and each decline falls further.
• MACDA momentum indicator built from the difference between two moving averages.
• Market breadthHow many stocks are participating in a market move.
• Mean reversionThe tendency for prices that stretched far from an average to move back toward it.
• MomentumThe speed and strength of a price move.
• Moving average (MA)The average closing price over a set number of recent periods, plotted as a line.
• Moving average stackWhen short, medium and long moving averages line up in order with price above them all.
• OBV (On-Balance Volume)A running total that adds volume on up days and subtracts it on down days.
• Overbought / oversoldDescriptions of an indicator at an extreme: overbought after a big rise, oversold after a big fall.
• Pivot pointsIntraday support and resistance levels calculated from the prior day's high, low and close.
• Price actionReading the chart itself, such as candles, trends and levels, without relying on indicators.
• PullbackA short dip inside a larger uptrend.
• Range-boundTrading sideways between a clear floor and ceiling.
• Relative strengthHow a stock performs compared with a benchmark or its sector.
• Relative volume (RVOL)Today's volume compared with the stock's usual volume.
• ResistanceA price area where selling has repeatedly stopped a rise.
• RetracementA partial reversal of a prior move.
• ReversalA change in the direction of a trend.
• RSI (Relative Strength Index)A momentum oscillator from 0 to 100 that compares recent gains with recent losses.
• SMA (Simple Moving Average)The plain average of the last N closing prices.
• Stochastic oscillatorA momentum indicator comparing the close with the recent high-low range.
• SupportA price area where buying has repeatedly stopped a decline.
• Support/resistance flipA broken level that reverses its role: old resistance becomes support, or the reverse.
• Swing high and swing lowA local peak or trough on a chart that stands out from the bars around it.
• Technical analysisStudying price and volume history to judge the likely behavior of a market.
• Time frameThe length of time each bar on a chart represents, such as 5 minutes, 1 day or 1 week.
• TrendThe general direction of a price over time.
• TrendlineA line connecting two or more swing lows in an uptrend or swing highs in a downtrend.
• UptrendA series of higher highs and higher lows.
• VolumeThe number of shares or contracts traded in a period.
• Volume climaxA very high-volume bar that can mark an exhaustion point.
• Volume profileA chart that shows how much trading occurred at each price level.
• VWAP (Volume-Weighted Average Price)The average price of the day weighted by how much traded at each price.

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