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Commodity Marketing Chapter #3 Technical Analysis.

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Presentation on theme: "Commodity Marketing Chapter #3 Technical Analysis."— Presentation transcript:

1 Commodity Marketing Chapter #3 Technical Analysis

2 Bar Charts n 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 n Analyst records past history, but can use this information to help predict

3 Charting Prices

4 Bar Charts

5 n Volume: measure urgency behind price moves n 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 n Prices & Open interest rise: trend will probably continue n Prices rise & Open Int. falls, uptrend is ending n Prices, Open Int., & Volume fall, trend is about to change

6 Market Nicknames n Bull = one who expects prices to rise -a rising market n Bear = one who expects prices to fall -a falling market n PricesVolumeOpen IntMarket RisingRisingRisingBullish RisingFallingFallingBearish FallingRisingRisingBearish FallingFallingFallingBullish

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

8 Sideways Trend

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

10 Uptrend

11 Downtrend


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