Fidelity Advisor Emerging Markets Fund: Class I · NASDAQ:FIMKX
Fidelity Advisor Emerging Markets Fund: Class I — Fidelity Investments — Technical Presentation
134 slides from Fidelity Advisor Emerging Markets Fund: Class I's technical presentation
Slide 1: Getting Started with Technical Analysis
A Fidelity Investments Webinar Series Getting Started with Technical Analysis BROKERAGE: TECHNICAL ANALYSIS
Slide 2: Upcoming Webinars
Getting Started with Technical Analysis Learn the assumptions that guide technical analysis, and get to know the basics of trend trading. Understanding Indicators in Technical Analysis Identify the various types of technical indicators including, trend, momentum, volume, and support and resistance.
Slide 3: About Our Co-Author
Charles D. Kirkpatrick II, CMT Charles D. Kirkpatrick II, CMT, is president of Kirkpatrick & Company, Inc., a technical analysis research firm that publishes the Market Strategist investment newsletter. A past instructor in finance at the School of Business Administration, Fort Lewis College and Adj
Slide 4: Agenda
BROKERAGE: TECHNICAL ANALYSIS Defining Technical Analysis Charts, Chart Best Practices Types, and Chart for Trend Traders Construction Basics of Trend Analysis Agenda 4
Slide 5: Defining Technical Analysis
Defining Technical Analysis
Slide 6: Fundamental Analysis & Technical Analysis
BROKERAGE: TECHNICAL ANALYSIS Fundamental Analysis &Technical Analysis Two Common Types of Analysis Fundamental Analysis Technical Analysis 6
Slide 7: Defining Fundamental Analysis: Definition
BROKERAGE: TECHNICAL ANALYSIS Defining Fundamental Analysis Definition Fundamental analysts study companies using measures such as: • Quality of management • Labor relations • Inventory control • PE ratio and EPS growth rates • Return on equity and assets 7
Slide 8: Defining Fundamental Analysis: Limits
BROKERAGE: TECHNICAL ANALYSIS Defining Fundamental Analysis Limits Fundamental analysis does not help you with: • Timing of the investment • Making the selling decision • Quantifying the risk vs. reward 8
Slide 9: Defining Technical Analysis: Definition
BROKERAGE: TECHNICAL ANALYSIS Defining Technical Analysis Definition Technical analysis primarily studies historical market data. It also: • Focuses on the supply-and-demand dynamic expressed via stock prices • Visualizes shifts in supply-and-demand which can be seen in chart patterns • Accounts for
Slide 10: Defining Technical Analysis: Limits
BROKERAGE: TECHNICAL ANALYSIS Defining Technical Analysis Limits Technical analysis is still not a perfect investment method and has limits: • Patterns, trends, and indicators are never precise, and charts require human interpretation • Technical traders are susceptible to the same emotions and cogn
Slide 11: Defining Technical Analysis: Assumptions
BROKERAGE: TECHNICAL ANALYSIS Defining Technical Analysis Assumptions • Prices in freely traded markets are determined by the economic principles of supply-and-demand • Price discounts everything • Prices are nonrandom but not necessarily predictable • Prices have direction and tend to travel in obs
Slide 12: Charts, Chart Types, and Chart Construction
Charts, Chart Types, and Chart Construction
Slide 13: Charts, Chart Types, & Chart Construction
BROKERAGE: TECHNICAL ANALYSIS Charts, Chart Types, & Chart Construction Overview Analyze price Easily visualize behavior the patterns and trends within data 13
Slide 14: Charts, Chart Types, & Chart Construction Overview
BROKERAGE: TECHNICAL ANALYSIS Charts, Chart Types, & Chart Construction Overview Line Bar Candlestick Point & Figure Chart Chart Chart Chart 14
Slide 15: Chart Types: Bar Charts
BROKERAGE: TECHNICAL ANALYSIS Chart Types Bar Charts Visualizes • Open, High, Low, Close • Volume for a specific time interval Advantages • Most common • Easy to read • Provides full range of trading for time interval 15
Slide 16: Chart Types: Candlestick Charts
BROKERAGE: TECHNICAL ANALYSIS Chart Types Candlestick Charts Visualizes • Open, High, Low, Close • Volume for a specific time interval Advantages • Gaining popularity • More visual than a bar chart • Uses color to show differences between open and close prices 16
Slide 17: Chart Construction: Reversal Points
BROKERAGE: TECHNICAL ANALYSIS Chart Construction Reversal Points When a price is rising, stops, and then declines, the price at which the rise halted is a “reversal point.” • In this situation, the reversal point is called a “peak” and is important because it is where buyers were overcome by sellers
Slide 18: The Value of Reversal Points
BROKERAGE: TECHNICAL ANALYSIS The Value of Reversal Points The longer the trend, the more important Breakout the reversal point Breakout Above Above Peak C Reversal point importance is Breakout Peak B Peak C Peak B determined by the length of Above Peak A the trend before and after the Peak A peak o
Slide 19: Basics of Trend Analysis
Basics of Trend Analysis Fidelity.
Slide 20: The Value of Trends
BROKERAGE: TECHNICAL ANALYSIS The Value of Trends Technical analysis is based on the principles of trends Trends arise from the interaction of buyers and sellers Profit is made from a trend in prices A trend’s direction is described by the relative location of peaks and troughs 20
Slide 21: Assumptions about Trends
BROKERAGE: TECHNICAL ANALYSIS Assumptions about Trends Trends continue rather than reverse Trends are influenced by the next longer and the next shorter trend Trends are fractal, meaning that although they occur over different time periods, their behavior is the same Trends are not mechanical method
Slide 22: Uptrend
BROKERAGE: TECHNICAL ANALYSIS Uptrend An uptrend has successively higher peaks and higher troughs. 22
Slide 23: Downtrend
BROKERAGE: TECHNICAL ANALYSIS Downtrend A downward trend has successively lower peaks and lower troughs. 23
Slide 24: Sideways Trend
BROKERAGE: TECHNICAL ANALYSIS Sideways Trend A sideways trend is a period with no clear direction in prices. 24
Slide 25: Trend Influence
BROKERAGE: TECHNICAL ANALYSIS Trend Influence Keep time frame in mind while considering the importance of a trend. 25
Slide 26: From Trend to Trend Line
BROKERAGE: TECHNICAL ANALYSIS From Trend to Trend Line Definition A trend is a direction; a trend line is an attempt to define and use that direction. How do we draw trend lines? • From peak to peak • From trough to trough 26
Slide 27: Types of Trend Lines
BROKERAGE: TECHNICAL ANALYSIS Types of Trend Lines Overview Upward Downward Support and Sloping Sloping Resistance 27
Slide 28: Upward Sloping
BROKERAGE: TECHNICAL ANALYSIS Upward Sloping A line connecting trough to higher trough 28
Slide 29: Downward Sloping
BROKERAGE: TECHNICAL ANALYSIS Downward Sloping A line connecting peak to lower peak 29
Slide 30: Support and Resistance
BROKERAGE: TECHNICAL ANALYSIS Support and Resistance Support Horizontal line drawn through troughs at the same price level Resistance Horizontal line drawn through peaks at the same price level 30
Slide 31: Profiting from a Trading Range
BROKERAGE: TECHNICAL ANALYSIS Profiting from a Trading Range Green points are candles that hit support and resistance levels on close. Red are intraday and do not close at support and resistance. 31
Slide 32: When Support Becomes Resistance
BROKERAGE: TECHNICAL ANALYSIS When Support Becomes Resistance Once the price breaks through support, that support becomes future resistance. When the price eventually rallies back to that level, it hits selling pressure and reverses back down again. 32
Slide 33: When Resistance Becomes Support
BROKERAGE: TECHNICAL ANALYSIS When Resistance Becomes Support When resistance is penetrated, it can become support 33
Slide 34: Best Practices for Trend Traders
Best Practices for Trend Traders
Slide 35: Trend Trading Best Practices
BROKERAGE: TECHNICAL ANALYSIS Trend Trading Best Practices Determine: • Strategy and conditions for entering/exiting trade • Need of confirmation • Triggers that will cause the entry to be executed • Specific risk involved 35
Slide 36: Strategies for Trend Investors: Entry and Exit Strategies
BROKERAGE: TECHNICAL ANALYSIS Strategies for Trend Investors UPTREND Entry and Exit Strategies EXIT Entry strategy • Consider buying when chart patterns demonstrate a new trend Exit strategy • Consider selling when the trend reverses or ENTER appears to have ended When investors using technical anal
Slide 37: Entry Strategy
BROKERAGE: TECHNICAL ANALYSIS Entry Strategy 37
Slide 38: Exit Strategy
BROKERAGE: TECHNICAL ANALYSIS Exit Strategy The trend line crosses previous troughs. A trigger could be a breakout below the rising trend line. 38
Slide 39: Technical Analysis Webinar Series
Getting Started with Technical Analysis Learn the assumptions that guide technical analysis, and get to know the basics of trend trading. Understanding Indicators in Technical Analysis Identify the various types of technical indicators including, trend, momentum, volume, and support and resistance.
Slide 40: Visit the Fidelity Learning Center
Visit the Fidelity Learning Center Learn more about putting technical analysis to work for you Read: Access the Technical Indicator Guide Watch: Check out videos that define core technical concepts Attend: Register for monthly webinars 40
Slide 41: Thank You
Thank Please join us for our upcoming webinars Fidelity.com/webinars You Download Active Trader Pro for free at Fidelity.com/ATP Questions? Call a trading specialist at 877-907-4429 41
Slide 42: Important Information
BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned, are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves ri
Slide 43: Understanding Indicators in Technical Analysis
A Fidelity Investments Webinar Series Understanding Indicators in Technical Analysis BROKERAGE: TECHNICAL ANALYSIS
Slide 44: Technical Analysis Webinar Series
Getting Started with Technical Analysis Learn the assumptions that guide technical analysis, and get to know the basics of trend trading. Understanding Indicators in Technical Analysis Identify the various types of technical indicators, including trend, momentum, volume, volatility, and support and
Slide 45: About Our Coauthor
Charles D. Kirkpatrick II, CMT Charles D. Kirkpatrick II, CMT, is president of Kirkpatrick & Company, Inc., a technical analysis research firm that publishes the Market Strategist investment newsletter. A past instructor in finance at the School of Business Administration at Fort Lewis College and a
Slide 46: Agenda
BROKERAGE: TECHNICAL ANALYSIS Support & Technical Resistance Indicators Indicators Basics Volatility Trend Indicators Indicators Volume Momentum Indicators Indicators Agenda 4 Technical Indicators Basics
Slide 47: Technical Indicator Basics
X | Technical Indicator Basics Fidelity
Slide 48: What Is a Technical Indicator?
BROKERAGE: TECHNICAL ANALYSIS What Is a Technical Indicator? A technical indicator is a mathematical calculation based on historic price or volume. 6
Slide 49: Types of Technical Indicators
Trend Indicators Simple Moving Average (SMA), Exponential Moving Average (EMA), Moving Average Convergence/Divergence (MACD), Average Directional Movement Index (ADX) Momentum Indicators Stochastic Oscillator, Relative Strength Index (RSI) Types of Volume Indicators Technical On Balance Volume (OBV)
Slide 50: Trend Indicators
Q Trend Indicators Fidelity
Slide 51: Simple Moving Average: How It Works
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Simple Moving Average How It Works Simple Moving Determine trend direction Average (SMA) • If the SMA is positively sloping, the trend is up. • If the SMA is negatively sloping, the trend is down. This is the easiest moving average to construct. It is De
Slide 52: Simple Moving Average
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Simple Moving Average Using moving average crossovers to generate trading signals When a more sensitive (faster) SMA crosses above a less sensitive (slower) SMA from below, it is considered bullish. When a more sensitive (faster) SMA crosses below a less
Slide 53: Exponential Moving Average: How It Works
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Exponential Moving Average How It Works Exponential Identify trends earlier Moving Average • Use the same rules that apply to SMAs when interpreting EMAs. Keep in mind that EMAs are generally more sensitive to nearer-term (EMA) price movement. The EMA me
Slide 54: Exponential Moving Average
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Exponential Moving Average Both the EMA and the SMA here represent 30 days. EMA reacts faster to the first pullback and the subsequent rally. 12
Slide 55: Moving Average Convergence/Divergence: How It Works
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Moving Average Convergence/Divergence How It Works Moving Average Determine bullish or bearish Convergence/ • MACD crossing above the zero line is considered bullish, while crossing below the zero line is bearish. When MACD turns up from Divergence below
Slide 56: Moving Average Convergence/Divergence
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Moving Average Convergence/Divergence A. Bullish B. Bullish C. Bearish D. Bearish 14
Slide 57: Average Directional Movement Index: How It Works
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Average Directional Movement Index How It Works Average Measure strength of trend Directional • A strong trend is present when ADX is above 25; no trend is present when ADX is below 20. Movement Index • If the ADX is declining, it could indicate that the
Slide 58: Average Directional Movement Index
BROKERAGE: TECHNICAL ANALYSIS TREND INDICATOR Average Directional Movement Index ADX is less then 25 on the left side of the chart. +DM is greater than -DMI throughout the uptrend, though this is not a requirement. ADX has fallen below 25 on the right side of the chart and -DM has crossed up above +
Slide 59: Momentum Indicators
EY Momentum <5 Indicators 6 Fidelity
Slide 60: Overbought/Oversold in Oscillators
BROKERAGE: TECHNICAL ANALYSIS Overbought/Oversold in Oscillators • In bounded indicators, also called “oscillators,” • In some cases, the reaching of extreme levels a limit exists as to how high or low they can reach. indicates that a new trend has begun. In these • When the oscillator reaches a zon
Slide 61: Stochastic Oscillator: How It Works
BROKERAGE: TECHNICAL ANALYSIS MOMENTUM INDICATOR Stochastic Oscillator How It Works Stochastic Determine exit and entry Oscillator • Generally, the area above 80 indicates an overbought region, while the area below 20 is considered an oversold region. The Stochastic Oscillator is a • A sell signal i
Slide 62: Stochastic Oscillator
BROKERAGE: TECHNICAL ANALYSIS MOMENTUM INDICATOR Stochastic Oscillator This example is using a Slow Stochastic; note the effectiveness of the signals during the sideways trend. Divergences between price and oscillators can also generate signals. 20
Slide 63: Relative Strength Index: How It Works
BROKERAGE: TECHNICAL ANALYSIS MOMENTUM INDICATOR Relative Strength Index How It Works Relative Strength Determine the speed and change of price Index (RSI) • The RSI oscillates from zero and 100. Traditionally, the RSI is considered overbought when above 70 and oversold when below 30. RSI measures t
Slide 64: Relative Strength Index
BROKERAGE: TECHNICAL ANALYSIS MOMENTUM INDICATOR Relative Strength Index Overbought and oversold signals on the chart indicate price movement in the short term. 22
Slide 65: Volume Indicators
Volume Tavellercine) as Fidelity.
Slide 66: General Rules of Volume Theory
Increasing volume reinforces the trend direction. Declining volume diminishes the trend direction. General Rules of A price peak or trough on ultrahigh volume is often an important reversal Volume point in a trend. Theory Volume indicators should be considered warnings but not signals of change in t
Slide 67: On Balance Volume: How It Works
BROKERAGE: TECHNICAL ANALYSIS VOLUME INDICATOR On Balance Volume How It Works • The actual value of the OBV is unimportant; concentrate on its On Balance direction. Volume (OBV) • When price continues to make higher peaks and OBV fails to make higher peaks, the upward trend is likely to stall or fai
Slide 68: On Balance Volume
BROKERAGE: TECHNICAL ANALYSIS VOLUME INDICATOR On Balance Volume Bearish divergence: OBV is not confirming the higher peaks in price, which preceded the selloff. 26
Slide 69: Money Flow Index: How It Works
BROKERAGE: TECHNICAL ANALYSIS VOLUME INDICATOR Money Flow Index How It Works • Oversold levels typically occur below 20 and overbought levels Money Flow typically occur above 80. These levels may change depending on market conditions. Index (MFI) • Oversold or overbought levels are generally not rea
Slide 70: Money Flow Index
BROKERAGE: TECHNICAL ANALYSIS VOLUME INDICATOR Money Flow Index Bearish divergence: Price peak not Bearish Divergence confirmed by MFI. Bullish divergence: Price trough is not confirmed by MFI. Bullish Divergence 28
Slide 71: Accumulation/Distribution: How It Works
BROKERAGE: TECHNICAL ANALYSIS VOLUME INDICATOR Accumulation/Distribution How It Works Accumulation/ Determine the direction of a trend Distribution • When both price and Accumulation/Distribution are making higher peaks and higher troughs, the uptrend is likely to continue. Accumulation/Distribution
Slide 72: Accumulation/Distribution
BROKERAGE: TECHNICAL ANALYSIS VOLUME INDICATOR Accumulation/Distribution Negative divergence between price and Accumulation Distribution Negative Divergence between Price and Accumulation/Distribution 30
Slide 73: Volatility Indicators
Volatility Indicators 6 Fidelity.
Slide 74: Bollinger Bands: How It Works
BROKERAGE: TECHNICAL ANALYSIS VOLATILITY INDICATOR Bollinger Bands® How It Works Bollinger Bands Determine relative price • When the bands tighten during a period of low volatility, it raises the Bollinger Bands are a type of likelihood of a sharp price move in either direction. price envelope plott
Slide 75: Bollinger Bands
BROKERAGE: TECHNICAL ANALYSIS VOLATILITY INDICATOR Bollinger Bands® Riding Upper Band Oscillating between Bands Riding Upper Band Bands Narrowing Oscillating between Bands Bands Narrowing 33
Slide 76: Average True Range: How It Works
BROKERAGE: TECHNICAL ANALYSIS VOLATILITY INDICATOR Average True Range How It Works Average True Determine market volatility Range (ATR) • An expanding ATR indicates increased volatility, whether that’s selling or buying pressure. ATR is the average of true • A low ATR value indicates decreased volat
Slide 77: Average True Range
BROKERAGE: TECHNICAL ANALYSIS VOLATILITY INDICATOR Average True Range Periods of increased volatility are clearly identified by ATR. Increasing Volatility 35
Slide 78: Support and Resistance Indicators
Support and Resistance Indicators
Slide 79: Fibonacci Retracements: How It Works
BROKERAGE: TECHNICAL ANALYSIS SUPPORT AND RESISTANCE Fibonacci Retracements How It Works Fibonacci Provide support and resistance levels Retracements • Applying these percentages to the difference between the high and low price for the period selected creates a set of price objectives. Plot percenta
Slide 80: Fibonacci Retracements
BROKERAGE: TECHNICAL ANALYSIS SUPPORT AND RESISTANCE Fibonacci Retracements Here, we have drawn a down sloping Fibonacci Retracement line from the absolute peak to the absolute trough to determine levels of resistance we may meet. In this example, the first major correction occurred at 61.8% retrace
Slide 81: Fibonacci Retracements
BROKERAGE: TECHNICAL ANALYSIS SUPPORT AND RESISTANCE Fibonacci Retracements In this example, we have drawn a Fibonacci Retracement line from the trough to the peak of the price move for which we’re trying to determine retracement levels. In this instance, we found support at 38.2% retracement. 39
Slide 82: Technical Analysis Webinar Series
Getting Started with Technical Analysis Learn the assumptions that guide technical analysis, and get to know the basics of trend trading. Understanding Indicators in Technical Analysis Identify the various types of technical indicators including, trend, momentum, volume, and support and resistance.
Slide 83: Visit the Fidelity Learning Center
Visit the Fidelity Learning Center Learn more about putting technical analysis to work for you Read: Access the Technical Indicator Guide Watch: Check out videos that define core technical concepts Attend: Register for monthly webinars 41
Slide 84: Thank You
Thank Please join us for our upcoming webinars Fidelity.com/webinars You Download Active Trader Pro for free at Fidelity.com/ATP Questions? Call a trading specialist at 877-907-4429 42
Slide 85: Important Information
BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves ris
Slide 86: Identifying Chart Patterns with Technical Analysis
A Fidelity Investments Webinar Series Identifying Chart Patterns with Technical Analysis BROKERAGE: TECHNICAL ANALYSIS
Slide 87: Technical Analysis Webinar Series
Getting Started with Technical Analysis Learn the assumptions that guide technical analysis, and get to know the basics of trend trading. Understanding Indicators in Technical Analysis Identify the various types of technical indicators, including trend, momentum, volume, volatility, and support and
Slide 88: About Our Coauthor
Charles D. Kirkpatrick II, CMT Charles D. Kirkpatrick II, CMT, is president of Kirkpatrick & Company, Inc., a technical analysis research firm that publishes the Market Strategist investment newsletter. A past instructor in finance at the School of Business Administration at Fort Lewis College and a
Slide 89: Agenda
BROKERAGE: TECHNICAL ANALYSIS Techniques for Trading Patterns Understanding Construction Patterns and of Common Their Limits Chart Patterns Agenda 3
Slide 90: Understanding Patterns and Their Limits
Understanding Patterns and Their Limits
Slide 91: Defining Patterns
BROKERAGE: TECHNICAL ANALYSIS Defining Patterns • A pattern is bounded by at least two trend lines (straight or curved) • All patterns have a combination of entry and exit points • Patterns can be continuation patterns or reversal patterns • Patterns are fractal, meaning that they can be seen in any
Slide 92: The Limits of Patterns: Keep in Mind
BROKERAGE: TECHNICAL ANALYSIS The Limits of Patterns Keep in Mind Some of our human tendencies can be dangerous for investors. • See patterns where there aren’t any • Believe “market lore,” technical and fundamental, without evidence • Look backwards rather than forward • Stick with original price t
Slide 93: Techniques for Trading Patterns
Techniques for Trading Patterns
Slide 94: Techniques for Trading Patterns
BROKERAGE: TECHNICAL ANALYSIS Techniques for Trading Patterns • Breakouts • Entry Stops • Protective Stops • Retracements 8
Slide 95: Breakouts
BROKERAGE: TECHNICAL ANALYSIS Breakouts Violation of Trend Line, Support or Resistance, or previous reversal point It signifies that a change Resistance Breakout in buyer and seller behavior and signals the beginning or end of a trend. Price 9
Slide 96: Confirmation Filters: Types of Filters
BROKERAGE: TECHNICAL ANALYSIS Confirmation Filters Types of Filters Confirmation • Intrabar Filters • Multiple closes Apply a confirmation filter to • Time determine whether a breakout • Percentage or point has taken place. • Money 10
Slide 97: Entry Stops
BROKERAGE: TECHNICAL ANALYSIS Entry Stops Entry Stops Buy stop orders are used to enter trades once the price breaks out. Resistance Breakout Trend Line Breakout 11
Slide 98: False and Failed Breakouts
BROKERAGE: TECHNICAL ANALYSIS False and Failed Breakouts False Breakout Breakout False Breakout (return Price breaks out but almost Resistance through breakout level) immediately returns back Line through its breakout price. Failed Breakout Failed Breakout (Trap) False breakout occurs and the price
Slide 99: Protective Stops
BROKERAGE: TECHNICAL ANALYSIS Protective Stops Protects Capital Determines the amount of capital risk before entry Types of placement Breakout Resistance Line • Filters, such as percent, points, or money • Trend line, support or resistance level with filter Protective Stop 13
Slide 100: Trading False Breakouts Using Protective Stops
BROKERAGE: TECHNICAL ANALYSIS Trading False Breakouts Using Protective Stops Example False Breakout Protective sell stop and sell • Enter on breakout short entry stop • Place protective stop outside breakout bar opposite from breakout direction • Place entry stop at same Failure level (called a “sto
Slide 101: Retracements
BROKERAGE: TECHNICAL ANALYSIS Retracements Counter Trend Correction Retracement (pullback) Types • Pullback (on breakout down) • Throwback (on breakout up) Waiting for Trend Line Breakout • Don’t always occur • Performance can suffer when they do 15
Slide 102: Construction of Common Chart Patterns
Construction of Common Chart Patterns
Slide 103: Common Chart Patterns
BROKERAGE: TECHNICAL ANALYSIS Common Chart Patterns Multi-Bar Candlestick Short-Term Patterns Patterns Patterns Horizontal Congestion • Doji • Pennant/Flag • Double and Triple • Harami • Gaps Tops/Bottoms • Hanging Man/Hammer • Pipe Bottom • Rectangles • Shooting Star/Inverted • Narrow Range Hammer
Slide 104: Horizontal Congestion: Double Top
BROKERAGE: TECHNICAL ANALYSIS Horizontal Congestion: Double Top Characteristics: Double Top Double Top (breakout down) • Two successive peaks separated by an opposite reversal point Resistance Line • Either rounded or pointed peaks that are usually at roughly the same Entry Pullback price (resistanc
Slide 105: Horizontal Congestion: Double Bottom
BROKERAGE: TECHNICAL ANALYSIS Horizontal Congestion: Double Bottom Characteristics: Double Bottom (breakout up) • Two successive troughs separated by a peak Breakout Breakout • Either rounded or pointed troughs Resistance line that are usually at roughly the same price (support level) Entry Throwbac
Slide 106: Horizontal Congestion: Triple Top
BROKERAGE: TECHNICAL ANALYSIS Horizontal Congestion: Triple Top Characteristics: Triple Top (breakout down) • Three distinct peaks at roughly the Triple Top same price level separated by two intermittent troughs Resistance line • Breakout occurs when price exceeds Pullback the extreme of the intermi
Slide 107: Horizontal Congestion: Triple Bottom
BROKERAGE: TECHNICAL ANALYSIS Horizontal Congestion: Triple Bottom Characteristics: Triple Bottom (breakout up) • Three distinct troughs at roughly the same price level separated by two intermittent peaks at any level Entry Breakout Breakout Resistance line • Breakout occurs when price exceeds the e
Slide 108: Horizontal Congestion: Rectangles
BROKERAGE: TECHNICAL ANALYSIS Horizontal Congestion: Rectangles Characteristics: Rectangle (entry up, breakout up) Resistance Zone • Trading range with support and resistance levels bounding price Entry Throwback action Support Zone Shortfall Breakout Breakout • Slight tilt, similar to horizontal Re
Slide 109: Triangle: Symmetrical
BROKERAGE: TECHNICAL ANALYSIS Triangle: Symmetrical Characteristics: Symmetrical Triangle (breakout up) • Bounded by a downward sloping upper trend line and an upward sloping lower trend line. Each bound Throwback is a straight trend line Breakout Target Line • Prices must touch each bound at Entry
Slide 110: Triangle: Ascending
BROKERAGE: TECHNICAL ANALYSIS Triangle: Ascending Characteristics: Ascending Triangle (breakout down) • Bounded by a horizontal upper trend line and an upward sloping lower Pullback Resistance line trend line. Each bound is a straight Target trend line Line Entry • Prices can break in either directi
Slide 111: Triangle: Descending
BROKERAGE: TECHNICAL ANALYSIS Triangle: Descending Characteristics: Descending Triangle (breakout down) • Bounded by two trend lines; the lower is horizontal and the upper Resistance line slopes downward Downtrend Line Pullback • Prices can break in either direction Entry but most commonly downward*
Slide 112: Triangle: Wedge
BROKERAGE: TECHNICAL ANALYSIS Triangle: Wedge Characteristics: Rising Wedge (breakout down from climax peak) • Bounded by two trend lines, each headed in the same direction; Price Climax Pullback must touch a trend line at least five times (3 times on one and 2 times on the other) before a breakout
Slide 113: Head and Shoulders: Top
BROKERAGE: TECHNICAL ANALYSIS Head and Shoulders: Top Characteristics: Head • Three peaks with center peak higher than the other two Left Shoulder Right Shoulder Breakout • Shoulders should be at approximately the same level and the head higher • Line connecting the two throughs Neckline between the
Slide 114: Head and Shoulders: Bottom (Inverse)
BROKERAGE: TECHNICAL ANALYSIS Head and Shoulders: Bottom (Inverse) Characteristics: • Inverted but otherwise Head and Shoulders Bottom identical to a top pattern (breakout up) except not as profitable* Price Breakout Breakout Neckline Neckline Entry Throwback Left Shoulder Left Shoulder Right Should
Slide 115: Cup and Handle (also Saucer)
BROKERAGE: TECHNICAL ANALYSIS Cup and Handle (also “Saucer”) Characteristics: Rounding Bottom (breakout up) • Pattern consists of a rounded bottom (not a “V” bottom), two “lips” at each Price Breakout end, and a “handle” (similar to a flag Entry Breakout Lip pattern) from the handle • Pattern is com
Slide 116: Trading with Patterns
BROKERAGE: TECHNICAL ANALYSIS Trading with Patterns = Buy Wedge = Stop Wedge = Exit Triangle Triangle Rectangle *Source: Technical Analysis: the Complete Resource for Financial Market Technicians, 2 nd ed. 30
Slide 117: Best Multi-Bar Patterns
BROKERAGE: TECHNICAL ANALYSIS Best Multi-Bar Patterns Upward Signals Downward Signals • Descending • Flag Triangle • Head and • Rectangle Shoulders top • Pipe Bottom • Island Reversal 31
Slide 118: General Information about a Candlestick
BROKERAGE: TECHNICAL ANALYSIS General Information about a Candlestick Characteristics: • Traditionally, candlestick patterns are reversal patterns, meaning they are used to identify when a trend is ending • Candlestick patterns are often used with longer-term trends, thus, upward reversal patterns a
Slide 119: Doji
BROKERAGE: TECHNICAL ANALYSIS Doji Characteristics: Doji • A one-candle pattern formed when the open and close are the same price, and the high and low are roughly equidistant from the open and close • Extremely common • Indicates indecision in the marketplace and thus is a possible warning of price
Slide 120: Harami
BROKERAGE: TECHNICAL ANALYSIS Harami Characteristics: Harami • A two-candle pattern of a large body of either Top Bottom color followed by a small body of the opposite color; The second body is completely within the body of the large body and is called a “spinning top” • Although common belief is th
Slide 121: Hanging Man and Hammer
BROKERAGE: TECHNICAL ANALYSIS Hanging Man and Hammer Characteristics: Hanging Man — Hammer • One-candle patterns differentiated by the color Top Bottom of the body. Each pattern has a high that coincides with either the opening or closing price • Hanging man, thought to be a continuation pattern, ac
Slide 122: Shooting Star and Inverted Hammer
BROKERAGE: TECHNICAL ANALYSIS Shooting Star and Inverted Hammer Characteristics: Shooting Star and Inverted Hammer • A one-candle inverted hanging man or hammer Top Bottom pattern. Hammers by themselves have white bodies and shooting stars have black bodies • As a one-candle pattern, the shooting st
Slide 123: Engulfing
BROKERAGE: TECHNICAL ANALYSIS Engulfing Characteristics: Engulfing • A two-bar pattern in which the second bar Top Bottom body completely engulfs the first bar body* • A bottom engulfing pattern, with a short black body followed by a tall white body, is thought to be an upward reversal pattern and a
Slide 124: Dark Cloud Cover and Piercing Line
BROKERAGE: TECHNICAL ANALYSIS Dark Cloud Cover and Piercing Line Characteristics: Dark Cloud Cover and Piercing Line Top Bottom • The dark cloud cover is a two-bar pattern where the second bar closes higher than the first and is black versus white in the first bar • The piercing line is the opposite
Slide 125: Pennant/Flag
BROKERAGE: TECHNICAL ANALYSIS Pennant/Flag Characteristics: Flag and Pennant • Pennant and flag patterns are variations of the same pattern in upward trend Flag Pennant • These patterns are often preceded by a steep, sharp price change, up or Price down, and form a short consolidation that appears l
Slide 126: Gaps
BROKERAGE: TECHNICAL ANALYSIS Gaps Characteristics • Definition – no trading (gap) at specific prices • Gaps can be considered “up” or “down” • Gaps are caused by appreciable changes in supply and demand from one close to the following open Gap Up 40 *Source: Technical Analysis: the Complete Resourc
Slide 127: Gaps
BROKERAGE: TECHNICAL ANALYSIS Gaps Characteristics • Gaps are generally profitable on breakouts from patterns, trends, support or resistance • A method of trading a gap is the “explosion gap pivot.” It assures Breakout that the gap is valid • After the gap, wait for “throwback.” If throwback “covers
Slide 128: Two-Bar Reversal Button or Pipe Bottom
BROKERAGE: TECHNICAL ANALYSIS Two-Bar Reversal Button or Pipe Bottom Two-Day Reversal Bottom Characteristics: (or Pipe Bottom) • Two bars and occurs at the end of a large trend, up or down trend. Ideally, the first bar, in a bottom pattern, closes at the low, and the second bar closes in the upper h
Slide 129: Volatility Patterns
BROKERAGE: TECHNICAL ANALYSIS Volatility Patterns Characteristics: Inside Bar • Dull activity is known as “low volatility.” New trends often begin from periods of low volatility Buy next bar at opening above inside • One way to look at volatility is to observe the bar close relationship between pric
Slide 130: Narrow Range
BROKERAGE: TECHNICAL ANALYSIS Narrow Range Characteristics: NR4 • One low volatility pattern is called a “Narrow Range” pattern and consists of a bar with a Range on day 4 less range narrower than its preceding bars than days 1-3 • The graph shows a four-bar, Narrow Range pattern (NR4) with four bar
Slide 131: Technical Analysis Webinar Series
Getting Started with Technical Analysis Learn the assumptions that guide technical analysis, and get to know the basics of trend trading. Understanding Indicators in Technical Analysis Identify the various types of technical indicators including, trend, momentum, volume, and support and resistance.
Slide 132: Visit the Fidelity Learning Center
Visit the Fidelity Learning Center Learn more about putting technical analysis to work for you Read: Access the Technical Indicator Guide Watch: Check out videos that define core technical concepts Attend: Register for monthly webinars 46
Slide 133: Thank You
Thank Please join us for our upcoming webinars Fidelity.com/webinars You Download Active Trader Pro for free at Fidelity.com/ATP Questions? Call a trading specialist at 877-907-4429 47
Slide 134: Important Information
BROKERAGE: TECHNICAL ANALYSIS Important Information Any screenshots, charts, or company trading symbols mentioned are provided for illustrative purposes only and should not be considered an offer to sell, a solicitation of an offer to buy, or a recommendation for the security. Investing involves ris