Chapter #3 Technical Analysis Commodity Marketing Chapter #3 Technical Analysis

Bar Charts Important market information: Price: high, low, close for the day Volume: number of contracts traded Open Interest: number of contracts that haven’t been offset Analyst records past history, but can use this information to help predict

Charting Prices

Bar Charts

Bar Charts Volume: measure urgency behind price moves Open Interest: number of contracts at the end of each day that are not offset rises: new money flowing in falls: money is leaving the market Prices & Open interest rise: trend will probably continue Prices rise & Open Int. falls, uptrend is ending Prices, Open Int., & Volume fall, trend is about to change

Market Nicknames Bull = one who expects prices to rise a rising market Bear = one who expects prices to fall a falling market Prices Volume Open Int Market Rising Rising Rising Bullish Rising Falling Falling Bearish Falling Rising Rising Bearish Falling Falling Falling Bullish

Price Trends General direction which prices are moving Prices move: up, down or sideways Sideways Trend: called a trading range Resistance line (upper level) prices turn down Support line (lower level) prices turn up

Sideways Trend

Trends Uptrend: higher highs, higher lows Draw a line under rising bottoms Downtrend: lower highs, lower lows Draw a line under falling tops Takes two to define a trend, three to confirm it

Uptrend

Downtrend