Lecture 7 Technical Analysis. Economics 98 / 198 Fall 2007. Announcements. Hand in homework by the end of class . Current Events / News. Simulation Discussion. Lecture Content. Today…. Introduction to technical analysis Basics & definitions Stock charts & chart types Moving Averages
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Economics 98 / 198
Price at whichBUYERS>SELLERSconsistently.
Buyers who missed out on the first dip will be pressured to buy if price continues to respect the support.
AMZN retraces from a monstrous rally to $60
AMZN stops tanking at $60. NOT A COINCIDENCE.
You should have sold here, at the BREAK DOWN.
SELL if support “breaks down”, because it signifies that BUYERS no longer overpower SELLERS.
Breakdowns are a BEARISH SELL signal.
Price at which SELLERS overwhelm BUYERS consistently.
When a stock makes a new high and then retraces, sellers who missed out @ the previous peak will feel pressured to sell when price climbs back to that level.
When price “breaks out” above resistance, it becomes a new support level. *** IMPORTANT ***
Breakout signifies clear dominance of BUYERS. (good time to buy)
This is a BULLISH BUY signal.
My favorite trade setup.
20 DMA and 50 DMA becomes points of support for this stock
Getting comprehensive stock charts