1. Bar Chart
A single vertical line with opening price on the left side and the closing price on the right side. The advantage of using a bar chart over a straight line graph is that it shows the high, low, open and close for each particular day.
2. CandleStick Charting
A vertical line with a cylindrical body. Body is black or red if stock closed lower. Body is white or green if stock closed higher.
Patterns :
- Bullish : cylindrical equispaced between low and high,
- Bearish : cylindrical portion more at the bottom of the line.
- Hammer : small cylindrical portion at the top of the line : indicate the reveral in downtrend is in the works
- Star : a single horizontal line at the center of a vertical line - stock going to change its course
3. Point and Figure Chart
Mainly for intraday charting.
increases are represented by a rising stack of "X"s, while decreases are represented by a declining stack of "O"s.
4. Moving Average Chart
Average value of price over a period of time. 50 day average chart->average of 50 days closing price. The most commonly used moving averages are of 20, 30, 50, 100 and 200 days.Typically, when a stock price moves below its moving average it is a bad sign because the stock is moving on a negative trend. The opposite is true for stocks that exceed their moving average - in this case, hold on for the ride.
5. The Relative Strength Index
RSI = 100 - [100/(1 + RS)]
where:
RS = (Avg. of n-day up closes)/(Avg. of n-day down closes)
n= days (most analysts use 9 - 15 day RSI)
At around 70, stock is overbought. Better to sell at this point. In a bullish market, wait till 80
At around 30, stock is oversold. Better to buy at this point. In a bearish market, wait till 20
6. The Money Flow Index
Average price for the day:
Average Price = (Day High + Day Low + Close ) / 3
Now we need the Money Flow:
Money Flow = Average Price x Day's Volume
If the price was up in a particular day, this is considered to be "positive money flow". If the price closed down, it is considered to be "negative money flow".
Money Flow Ratio = (Positive Money Flow ) / (Negative Money Flow)
Other Methods
- Support and Resistance
- Bollinger Bands
