10 Tips to Getting Started With Technical Analysis
John Lansing, May 19, 2009
Free Trading Guides
-
Tip #5: Continuations and Reversals
As I stated earlier, trends tell us direction, and there are really only two trends to technical analysis: continuations and reversals.
A continuation indicates that a stock may be taking a slight detour toward where it's ultimately headed, but it will likely resume its expected pattern.
A reversal is a breakout in a direction opposite to the previous trend. It marks a change in direction of the price of the stock. The two different types of primary reversal trends are bullish trend reversals and bearish trend reversals.
Trends and reversals are the basic foundation upon which technical analysis is built. So, if you get these basic concepts, you're on your way to becoming an expert in technical analysis!
More By This Expert
The 'MAC' Daddy of Moving Averages
Learn how the Moving Average Convergence/Divergence (MACD) can help you to identify when a stock is overbought or oversold.
Technical Analysis 101: Buying Pressure
Find out how buying pressing can help you to identify potential long positions.
Technical Analysis 101: Trading Volume
Learn how to use volume to help you to spot potential breakouts and protect yourself from consolidations.
Technical Analysis 101: Resistance and Support Levels
Expert explains how technical support and resistance levels are formed.
Technical Analysis 101: Cup-and-Handle Pattern
Learn how to use this pattern to identify the potential for a stock to break out.
MOST POPULAR
- What's Hot: DELL, DHI November 20, 2009
- Sidewinder: MCD, DKS, JPM November 20, 2009
- Options News: SII November 20, 2009
- Sidewinder: CY, ADSK, KG November 19, 2009
- Options for Dummies November 19, 2009
Options Broker Center
