Tuesday, September 21, 2010
TIPS FOR THE DAY(21.9.10)
BSE INDICES EOD CHARTS
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Monday, September 20, 2010
MCX EOD CHARTS
Monday, October 12, 2009
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Thursday, September 9, 2004
A gap is a change in price levels between the close and open of two consecutive days. Although most technical analysis manuals define the four types of gap patterns as Common, Breakaway, Continuation and Exhaustion, those labels are applied after the chart pattern is established. That is, the difference between any one type of gap from another is only distinguishable after the stock continues up or down in some fashion. Although those classifications are useful for a longer-term understanding of how a particular stock or sector reacts, they offer little guidance for trading.
For trading purposes, we define four basic types of gaps as follows:
Full Gap Down occurs when the opening price is less than yesterday's low
Full Gap Up occurs when the opening price is greater than yesterday's high price.
Partial Gap Up occurs when today's opening price is higher than yesterday's close, but not higher than yesterday's high.
Partial Gap Down occurs when the opening price is below yesterday's close, but not below yesterday's low.
Stochastic Slow
Stochastic is an oscillator that measures the position of a stock or security compared with its recent trading range indicating overbought or oversold conditions.
It displays current day price at a percentage relative to the security’s trading range (high/low) over the specified period of time.
Fast Stoc =%K =[(todays close) - (low price in period n)]/[(high price in period n)-(low price in period n)]
In a Slow Stochastic, the highs and lows are averaged over a slowing period. The default is usually 3 for slow and 1 (no slowing) for fast. The line can then be smoothed using an exponential moving average, Weighted, or simple moving average %D. Confirming Buy/sell signals can be read at intersections of the %D with the %K as well.
The Stochastic Oscillator always ranges between 0% and 100%. A reading of 0% shows that the security's close was the lowest price that the security has traded during the preceding x-time periods. A reading of 100% shows that the security's close was the highest price that the security has traded during the preceding x-time periods. When the closing price is near the top of the recent trading range (above 80%), the security is in an overbought condition and may signal for a possible correction. Oversold condition exists at a point below %20. Prices close near the top of the range during uptrends and near the bottom of the range during downtrends.
MACD - Moving Average Convergence/Divergence
This indicator uses three exponential moving averages, a short or fast average, a long or slow average and an exponential average of their difference, the last being used as a signal or trigger line. To fully understand the basics of MACD you must first understand simple moving averages. The Moving Average Convergence/Divergence indicator measures the intensity of public sentiment and is considered by Gerald Appel, its developer, to be a very good indicator signaling market entry points after a sharp decline. This indicator reveal overbought and oversold conditions and generates signals that predict trend or price reversals. It provides a sensitive measurement of the intensity of public sentiment and can be applied to the stock market, to individual stocks or to mutual funds. In some instances, it can provide advance warning of reversals allowing you to buy into weakness and sell into strength.
The Moving Average Convergence/Divergence indicator (MACD) is calculated by subtracting the value of 26-day exponential moving average from a 12-day exponential moving average. A 9-day exponential moving average (the "signal line") is automatically displayed on top of the MACD indicator line.
The basic MACD trading rule is to sell when the MACD falls below its 9-day signal line. Similarly, a buy signal occurs when the MACD rises above its signal line.