Support and resistance are two of the most important concepts in technical analysis. How can investors potentially gain insight by applying support and resistance? One simple way to think about support and resistance is by imagining a floor and ceiling for stock prices. Imagine spiking a bouncy rubber ball on the floor. What happens when […]

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Some traders who use technical analysis can fall prey to the idea that profitability comes only from teasing and torturing indicators. And some may do it to such an extent that the indicators no longer retain their logic and can lose some effectiveness. But when it comes to identifying opportunities in the stock market, sometimes […]

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Bollinger Bands are one of the more widely used technical indicators because they are relatively simple to understand and intuitive to apply. Among other applications, some traders apply Bollinger Bands to measure overbought or oversold conditions in stocks, indexes, futures, forex, and other markets. In this article, we’ll take a look at applying Bollinger Band […]

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The jobs report released last week was okay, but not enough to supercharge expectations that the Fed would hike interest rates during its September 21 meeting. For the S&P 500, this might mean more of the same: sideways trading, within a well-defined range.  The longer-term trend in U.S. stocks, however, remains bullish, evidenced by the […]

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There are a number of well-known sayings related to stock market trends. For example: “the trend is your friend,” or “don’t fight the trend.” They help traders remember to trade with, not against, the prevailing trend. But some traders only follow the trend in order to trade against it. They’re called contrarians, and although their […]

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Are you a head-and-shoulders, pennant and channel person, or do you prefer the doji, shooting star and Harami? In other words, when studying charts, do you follow traditional technical analysis and bar charts, or do you prefer candlestick charting? If you are looking for some extra illumination in your trading and investing, candlesticks may be […]

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It’s important to identify general trends, but technicians seek to understand why trends happen, or the investor behavior that creates trends. Technicians use the concepts of supply and demand to explain why trends occur and how human behavior shapes stock prices. Supply is the number of shares available for purchase at a certain price. Demand […]

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Imagine a wide and expansive battlefield. On each side stand thousands of warriors determined to overwhelm their foes and claim further enemy territory for their own. When the combatants first engage, the battle lines are fluid, moving in one direction, then reversing course and returning to where they started. This give and take goes on […]

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Charts can help technicians identify potential buying and selling opportunities, including those signaled by support and resistance bounces and breaks. Let’s define both, starting with bounces. A support bounce occurs in a series of bars at support. Investools instructors refer to this as a CAHOLD, or a Close Above the High Of the Low Day. […]

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Price patterns are probably the most recognizable technical analysis technique. This may be because of their simplicity. However, some traders make them more complicated than they need to be. Price patterns are really just another form of support and resistance. They occur because support and resistance form horizontally and diagonally, often creating common shapes. Let’s […]

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