Technical Analysis Experiment

This is again a good timing to sell surfing the retracement to the lower part of the green channel.

EURUSD broke down the channel started in April 2107 with an head and shoulder, apparently it has already done the pullback on the green support (now resistance). What to say? Classical sell signal with stop inside the green channel. Only adverse signals are MACD and Stochastic in ipersold, but we are keeping the stoploss not far from the current price so it is ok to sell.

With the S&P500 we reached again the area near the top of the bullish channel. Last sell signal was a midtrend flag that lead the current mini trend to reach the top of the channel (current position).  In this position we should sell with stop over the channel if it breaks the channel with high volumes. It it breaks with small volumes it could be the last acceleration before getting down. It is probable that the price will drop to the mid-lower part of the channel in a single session, as it happened many times inside this channel. Update : nearly there:

AAPL is testing the upper resistance of the red channel. The volumes are low, it is more like that it will stay in the channel, but anyway: this is a time to sell with stop and reverse if the prices breakout the channel with strong volumes . In a situation like this, but with different volumes, look what BTC/USD did in a similar situation last week:

If you are used to see stock charts from the movies you may be confused looking at the charts used in this blog: In this article I will explain the bare minimum to understand what you are seeing, in later articles I will explain in detail every element of the chart. First of all: where is the price line? The chart that we use for   technical analysis  (but we should call it statistical analysis   of the price progression ) are an evolution of the line charts.  This is how a line chart looks like: It is done connecting with a line the price point of every single time frame. For example if the time frame is a day you can have a point at the price of the stock for that day and then connect every point: This is good but not the best: every time frame, let's say every day, the prices move up and down, how can you make a decision about which price use as point for the day?  You can use the closure price or the average or the weighted average ...

The european index is clearly in a new positive trend: it broke the red channel with high volumes after a MACD Divergence bouncing on the sma200.  Usually when it breaks a long channel it should have a pullback on it or near it with smaller volumes. Instead this time it had lateral movement with low volumes under a long trend line (the gray one).  This can be read as a weak pullback meaning the beginning of a strong positive trend. The trend is positive so we have to wait the lower part of the green channel to buy. Now that is passed over the gray trend line we can risk a to buy a   small  lot with a stop just below the gray trend line or below the green channel, and wait the lower part of the channel and bigger confirmation from the volumes to put a bigger lot on the market.