OVERLAYS: Overlays are generally superimposed over the main price chart.

Price channels

A price channel is a pair of parallel trend lines that form a chart pattern for a stock or
commodity. Channels may be horizontal, ascending or descending. When prices pass through
and stay through a trend line representing support or resistance, the trend is said to be broken and
there is a "breakout".

Ichimoku Kinko Hyo

( Ichimoku Kink Hy?) Usually just called ichimoku is a technical analysis
method that builds on candlestick charting to improve the accuracy of forecast price
moves. It was developed in the late 1930s by Goichi Hosoda ( Hosoda Goichi?),
a Japanese journalist who used to be known as Ichimoku Sanjin, which can be translated
as "what a man in the mountain sees".[citation needed] He spent 30 years perfecting the
technique before releasing his findings to the general public in the late 1960s. Ichimoku
Kinko Hyo translates to one glance equilibrium chart or instant look at the balance chart
and is sometimes referred to as "one glance cloud chart" based on the unique "clouds"
that feature in ichimoku charting.

Moving average
In statistics, a moving average (rolling average or running average) is a
calculation to analyze data points by creating series of averages of different
subsets of the full data set. It is also called a moving mean (MM) or rolling
mean and is a type of finite impulse response filter. Variations include:
simple, and cumulative, or weighted forms. A moving average is commonly
used with time series data to smooth out short-term fluctuations and
highlight longer-term trends or cycles. The threshold between short-term and
long-term depends on the application, and the parameters of the moving
average will be set accordingly. For example, it is often used in technical
analysis of financial data, like stock prices, returns or trading volumes.

Parabolic SAR

In stock and securities market technical analysis, parabolic SAR (parabolic stop and reverse) is a method
devised by J. Welles Wilder, Jr., to find potential reversals in the market price direction of traded goods
such as securities or currency exchanges such as forex. It is a trend-following (lagging) indicator and may
be used to set a trailing stop loss or determine entry or exit points based on prices tending to stay within a
parabolic curve during a strong trend.

Pivot point

In financial markets, a pivot point is a price level that is used by traders as a possible indicator
of market movement. A pivot point is calculated as an average of significant prices (high, low,
close) from the performance of a market in the prior trading period. If the market in the
following period trades above the pivot point it is usually evaluated as a bullish sentiment,
whereas trading below the pivot point is seen as bearish. It is customary to calculate additional
levels of support and resistance, below and above the pivot point, respectively, by subtracting or
adding price differentials calculated from previous trading ranges of the market.

Support and resistance

In technical analysis, support and resistance is a concept that the
movement of the price of a security will tend to stop and reverse at
certain predetermined price levels. These levels are denoted by
multiple touches of price without a breakthrough of the level.

If a stock price is moving between support and resistance levels, then a basic
investment strategy commonly used by traders, is to buy a stock at support and sell
at resistance, then short at resistance and cover the short at support as per the
following example:

Trend line
In finance, a trend line is a bounding line for the price movement of a
security. It is formed when a diagonal line can be drawn between a
minimum of three or more price pivot points. A line can be drawn
between any two points, but it does not qualify as a trend line until
tested. Hense the need for the third point, the test. Trend lines are
commonly used to decide entry and exit timing when trading
securities. They can also be referred to as a Dutch line, as the concept
was first used in Holland. A support trend line is formed when a
securities price decreases and then rebounds at a pivot point that
aligns with at least two previous support pivot points. Similarly a
resistance trend line is formed when a securities price increases and
then rebounds at a pivot point that aligns with at least two previous

resistance pivot points. Stock often begin or end trending because of a

stock catalyst such as a product launch or change in management.

Breadth indicators: These indicators are based on statistics derived from

the broad market.

Advancedecline line

The advancedecline line is a stock market technical indicator used by investors to measure the
number of individual stocks participating in a market rise or fall. As price changes of large stocks
can have a disproportionate effect on capitalization weighted stock market indices such as the
S&P 500, the NYSE Composite Index, and the NASDAQ Composite index, it can be useful to
know how broadly this movement extends into the larger universe of smaller stocks. Since
market indexes represent a group of stocks, they do not present the whole picture of the trading
day and the performance of the market during this day. Though the market indices give an idea
about what has happened during the trading day, advance/decline numbers give an idea about the
individual performance of particular stocks.

McClellan oscillator

The McClellan oscillator is a market breadth indicator used in technical analysis by financial
analysts of the New York Stock Exchange to evaluate the balance between the advancing and
declining stocks. The McClellan oscillator is based on the Advance-Decline Data and it could be
applied to stock market exchanges, indexes, portfolio of stocks or any basket of stocks.

The simplified formula for determining the oscillator is:

Oscillator = (19- day EMA of advances minus declines) (39 day EMA of advances minus
declines)
where advances is the number of the NYSE listed stocks which are traded above their previous

day close and "declines" is the number of the NYSE listed stocks traded below their previous day
close.Difference between advances and declines shows whether we have more advancing or
more declining stocks on the NYSE. Dominance of the advancing stocks is considered as bullish
Breadth sentiment and higher number of declining stocks is considered as bearish Breadth
sentimentBy applying 19-day and 39 day EMAs to the difference between advances and declines
we define shorter-term (19-day) and longer-term (39-day) Breadth sentiment.By calculating
McClellan Oscillator as the difference between 19-day EMA and 39-day EMA of advances
minus declines, we apply MACD principle to Breadth sentiment - to see changes in shorter-term
Breadth sentiment.
McClellan Summation Index
The McClellan Summation Index (MSI) is calculated by adding each day's McClellan oscillator
to the previous day's summation index. By using the summation index of the McClellan
oscillator, you can judge the markets overall bullishness or bearishness.
MSI properties:
When above zero it is considered to be bullish (positive growth)
When below zero it is considered to be bearish (negative growth)

The Summation index is oversold at 1000 to 1250 or overbought at 1000 to 1250.The number
of stocks in a stock market determines the dynamic range of the MSI. For the NZSX (one of the
smallest exchanges in the English-speaking world) the MSI would probably range between
(50 ... +50), the 19 and 39 constants (used for the US exchanges) would have to be revised. For
the NZSX a MSI moving-average mechanism might be needed to smooth out the perturbations
of such a small number of traded stocks.

Price-based indicators

These indicators are generally shown below or above the main price chart.

Average directional movement index

The average directional movement index (A.D.X.) was developed in 1978 by J. Welles Wilder
as an indicator of trend strength in a series of prices of a financial instrument. A.D.X. has
become a widely used indicator for technical analysts, and is provided as a standard in
collections of indicators offered by various trading platforms.

Calculations: The A.D.X. is a combination of two other indicators developed by Wilder, the
positive directional indicator (abbreviated +DI) and negative directional indicator (-DI).
The A.D.X. combines them and smooths the result with a smoothed moving average.To
calculate +DI and DI, one needs price data consisting of high, low, and closing prices each
period (typically each day). One first calculates the directional movement (+DM and DM):
Up Move = today's high yesterday's high
Down Move = yesterday's low today's low
If Up Move > Down Move and Up Move > 0, then +DM = Up Move, else +DM
=0
If Down Move > Up Move and Down Move > 0, then DM = Down Move, else
DM = 0

After selecting the number of periods (Wilder used 14 days originally), +DI and DI are:
+DI = 100 times the smoothed moving average of (+DM) divided by average
true range
DI = 100 times the smoothed moving average of (DM) divided by average
true range

The smoothed moving average is calculated over the number of periods selected, and the average
true range is a smoothed average of the true ranges. Then: A.D.X. = 100 times the smoothed
moving average of the absolute value of (+DI DI) divided by (+DI + DI)
Variations of this calculation typically involve using different types of moving averages, such as
an exponential moving average, a weighted moving average or an adaptive moving average.

MACD
MACD, short for moving average convergence/divergence, is a trading indicator used
in technical analysis of stock prices, created by Gerald Appel in the late 1970s. It is
supposed to reveal changes in the strength, direction, momentum, and duration of a trend
in a stock's price.The MACD indicator (or "oscillator") is a collection of three time series
calculated from historical price data, most often the closing price. These three series are:
the MACD series proper, the "signal" or "average" series, and the "divergence" series
which is the difference between the two. The MACD series is the difference between a
"fast" (short period) exponential moving average (EMA), and a "slow" (longer period)
EMA of the price series. The average series is an EMA of the MACD series itself.