For example, if a company announces that it will launch a new product or
that it earned a lot of money in the last quarter, more people may want to
own a share of that company. If more people want to buy shares but few
people want to sell, then the demand will be greater than the supply and
the price will go up. On the other hand, if there is bad news about a
company like low sales or problems with their factory, then people may
not want to own a share of that company anymore. If more people want
to sell their shares but fewer people want to buy, then supply will be
greater than demand and the price will go down.
Support is the price that, historically, a stock has had difficulty falling
below. This is the point where the market considers the price to be
“cheap”. Demand becomes so strong that it stops the price from going any
lower. In other words, marami nang gustong bumili kaya ‘di na masyado
bumababa yung presyo.
Resistance is simply the opposite of support. This is the point where the
stock price usually starts going down because there is too much supply and
not enough demand. Masyadong marami nang gusto magbenta kaya
bumababa yung presyo.
Support and resistance levels are not always precise and they can be
broken, but it’s a simple and proven concept that many find useful. The
basic rule when trading using support and resistance is to buy on support
and sell on resistance.
The general rule of thumb? Buy stocks on an uptrend. Avoid stocks on a
downtrend.
A lot of technical analysis involves looking at the stock price, but that’s
not the only important statistic in TA. Another equally important, if not
more important, number to look at is the trading volume.
The trading volume tells you the number of shares that were bought and
sold in a particular time frame (usually a day). You can see the volume
shown as a bar graph at the bottom of the stock chart.
Volume is important because it gives context to price movements. It tells
you how strong or weak a trend or chart pattern is.
For example: If the price of a downtrending stock starts going up, does it
mean the trend changed to an uptrend? Take a look at the volume and
you’ll find out. If the volume is low, then the trend will probably continue
going down. If the trading volume is high, it means that there is a strong
demand for the stock and the trend will likely change to an uptrend.
The rule of thumb? Kung high volume, push mo na. Kung low volume,
ingat muna.
There are many kinds of charts that traders can use to monitor the stock
market, but the most popular is probably the candlestick chart.
A candlestick chart shows four key prices for the day—the opening price,
closing price, highest price, and lowest price. These are based on that day’s
completed transactions.
If the candle is green, it means that the closing price was higher than the
opening price. If it is red, it means the opening price was higher than the
closing price.
The colors might change depending on the chart you’re using, but one
color will always show an increase in price over the day and another color
will show a decrease in price.
Head and Shoulders
A “head and shoulders” means that there are 3 peaks in your chart pattern
—the middle peak is the highest (head) with two relatively equal lower
peaks beside it (shoulders). This pattern signals a trend reversal, with the
line connecting the two “shoulders” as the key support level to watch. If
you see the price break below that level, expect a trend reversal or
breakdown of the stock. An inverse head and shoulders may also signal
that a downtrending stock is about to change to an uptrend.
Cup and Handle
A “cup and handle” forms when, after an uptrend, the chart forms a large
U-shaped curve (the “cup”) followed by a smaller dip before continuing
upward (the “handle”). This pattern signals that the the stock is bullish. If
the pattern is completed, the price will likely resume its previous upward
trend. If the right side of the handle breaks above the peak formed between
the cup and the handle, it confirms that the pattern is complete and that the
uptrend will resume.
Double Top or Double Bottom
A “double top” or “double bottom” forms when a stock hits its existing
support or resistance level two times without breaking through. After the
second peak or valley, watch out to see if the chart breaks the key support
or resistance level. If it does, you will likely see it continue all the way up
or down, forming a trend reversal.
. Moving Averages
There are many types of moving averages used in technical analysis, but
they all have one intention—to remove day-to-day price fluctuations and
make chart analysis easier. Moving averages allow us to plot smoother
lines that show trends and patterns more clearly.
One of the most popular types of moving averages is the simple moving
average (SMA). We’ll focus on this for now.
To find the simple moving average, just get the sum of all the prices in a
certain period and divide it by the number of prices you added up. The
most common periods used in TA are the last 20, 50, 100, or 200 trading
days but you can really use any period you want.
You can use these moving averages to determine support and resistance
levels and to identify trend reversals.
A long-term moving average, like the 200-day moving average, is often
used as a basis for the stock’s support or resistance. It shows the general
trend that the stock has been moving in.
A short-term moving average, like the 20-day moving average, shows how
the stock is performing now . When compared to the long-term moving
average, it shows to how the stock is performing compared to its past
performance.
If the short-term SMA line rises above the long-term SMA line, you should
buy stocks because it means the trend is going upward.
If the short-term SMA line falls below the long-term SMA line, you should
sell your stocks because it means the trend is going downward.
BREAKOUTS
Mas daghan ang buyers kaysa sa sellers. It could be because the company
has a positive review or naay good news. So imbis ang mga sellers kay naa
silay range sa resistance na mao na niy highest price para nila ig baligya,
mas nitaas pa hinoon.
BREAKDOWNS
Mas daghan ang sellers kaysa sa buyers. It could be because naay bad nga
review sa company so ang mga sellers kay ilaha nang gipangbaligya ang
ilahang mga shares kay nabalaka so since daghan naman ang supply kaysa
sa demand, mas mubarato ang presyo niya so mu breakdown in which
mulapas siya sa range sa support.
Uptrend- ang ga dominate ani is ang mga buyers kay mas dako ang
demand kaysa sa supply. Maybe nice ug impact ang kani na company sa
pilipinas
Downtrend- ang ga dominate is ang mga sellers kay bati man ang
performance sa company so gipamaligya nila ilahang shares so mas dako
ang supply kaysa sa demand so nibarato ang price.
If u have a stock na uptrend pag una then ni bend, mag cut loss usa
So sa uptrend, ok ra na dagko imohang pondo sa stock bec makaganinanysa ka pero if downtrend kay
quickie lang.