# 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)

![](/files/-MbChAxB1Er8iL8Hrzdo)

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

![](/files/-MbChLHKzwaQxge98MGs)

Trend patterns

![](/files/-MbChOI2grqKhl0BWJa7)

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 

![](/files/-MbChRBrOsTwXB-un4ou)


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