# Introduction to Stocks and Technical Analysis

Introduction to Stocks and
Technical Analysis

- Major Indices
- S&P 500 – Large Cap (SPX~SPY)
- Dow Jones 30 – Industrial Average (DJX~DIA)
- NASDAQ 100 – Electronic Trading (NDX~QQQ)
- RUT 2000 – Small Cap (RUT~IWM)
- Symbol nomenclature
- 4 character symbols correspond to the NASDAQ
- 3 or less character symbols correspond to the NYSE and AMEX

Symbol nomenclature

the character in any symbol:

- D – New
- E – Delinquent in required filings with SEC
- F – Foreign
- J – Voting
- K – Nonvoting
- Q – Bankruptcy Proceedings

Chart types

- Line charts (graphs the close of each bar)
- Candlestick charts
- OHLC charts (Open, high, Low, Close)

Simple moving averages are calculated by dividing the sum of the close N days back and
dividing by the number of data points
Most widely used Moving Averages by Professionals are

- ____day
- ____day
- ____day
- Exponential moving averages put more weight on recent days than previous days

- Bollinger Bands are used to gauge conditions of overbought and oversold, most widely used settings are 20,2 which means we will use a 20 day simple moving average as the center and go 2 standard deviations to either side from the center to create the Bollinger Bands

Oscillators are also used to gauge oversold/overbought situations they include

- RSI
- Stochastic Oscillators (Slow)
- The MACD (Moving Average Convergence/Divergence) measures the separation between exponential moving averages, giving us a good idea of the trend and it’s strength
- Volume .It gives us an idea of sentiment, ideally volume will go up on up days in an uptrend and vice versa on downtrends

Example of stochastic + macd + volume

Trend patterns

More examples

Where do they bounce back to do a pull-in? They usually bounce where they have bounced before – blue circles
What are the target prices? Targets are parallel to support or resistance, loser than support or resistance – yellow lines

Last modified 2yr ago