Tools of Technicians

Question 1

Charting

Answer 1

Involoves plotting of historical stock prices to determine a trading pattern. Involves potting 50, 100 , or 200 day moving average along with historical stock prices

Question 2

Market volume

Answer 2

market volume is high and market goes up, thats a positive indicator
market volume is high and market goes down, thats a negative indicator
volume low and and market goes up thats a negative indicator of investor sentinent
market vlume is low and market goes down, that’s a positive indicator regarding investor sentinent

Question 3

Short Interest

Answer 3

Number of shares sold short gives insight to future demand of stock. Short stock need to be purchased eventially. a high short interest indicates pent up demand

Question 4

Odd lot trading

Answer 4

small investors are most likely moving in wrong direction regarding their trades.

Question 5

Dow Theory

Answer 5

Signals end to bull or bear market- Does not indicate when it will happen just confirms that it has ended

Question 6

Breadth of market

Answer 6

Measures the number of stocks that increase in value versus the number of stocks that decline in value

Question 7

Advance Decline Lines

Answer 7

The difference between number of stocks that closed up versus the number of stocks that decreased in value