Smeal Technical Analysts

When I'm bearish and I sell a stock, each sale must

be at a lower level than the previous sale. When I
am buying, the reverse is true. I must buy on a rising
scale. I don’t buy long stocks on a scale down, I buy
on a scale up.

-Jesse Livermore
 Agenda

• A look at the markets & review

• Introduction to indicators
o Moving Averages
o MACD
What pattern do you see here?
• Symmetrical triangle forming
• How would you trade this? What confirmation would you look for?
• AAPL 60 Min
• Decreasing volume leading up to the apex of the triangle and a significant
increase when it breaks out
• Intra-day SPY – What sort of pattern do you see?
• Symmetrical Triangle Breakout
• Price target reached
 Moving Averages

• Moving averages are simply the average price of the

security over a certain period of time
• Tend to act as support and resistance
• Trend identification
• Many indicators are built on this concept
• Traders have their own preferences as to the period, I use
20,50,200

• Simple moving averages are equally weighted, however

exponential moving averages weight the most recent price
higher than older ones which reduces lag
Support and Resistance
Trend Identification
 Donchian Channels

• Donchian channels are created by plotting the highest and

lowest closing price in a specified period (This uses 10)
 Donchian Channels

• Donchian channels are used to identify breakouts. Typically

you would buy when the stock closes above the channel
 Turtle Traders

• Filter: long if the 50 period SMA is above the 350 period

SMA and short if the 50 is below the 350
• Entry rule: enter position when the price trades above or
below the 20 period donchian channel
• Exit rule: close position when the price touches the 10
period donchian channel
 MACD

• Calculated by subtracting the 12 day EMA from the 26 day

EMA.(Yellow Line) A signal line is also calculated by plotting
the 9 period EMA of the MACD (Blue Line)
 Crossovers

Occurs when the trigger (yellow) passes through the signal

(blue) line
 Divergences

Occurs when the price is moving in the opposite direction of the

MACD histogram. Indicates that a trend is ending
MACD Example
 Sector Assignments
Choose a technical indicator and create a presentation that
describes that indicator. Also, analyze a stock in your sector
using the indicator and other methods we have discussed
during our meetings.

• How does the indicator work?

• What does it tell us/what signals can you take
from it?
• Does it work well with another indicator
(confirmation)?
• Use the indicator to analyze a stock and share
your analysis with the group
 List of Indicators - Research
Stochastic Oscillator
Relative Strength Index (RSI)
StochRSI
Williams %R
Bollinger Bands
Average True Value (ATR)
Average Directional Index (ADX)
TRIX
Parabolic SAR
Accumulation/Distribution Line
Ultimate Oscillator
Keltner Channels
Zig-Zag
Market Internals (VOLD, TICK, TRIN, Breadth)