Smeal Technical Analysts

All through time, people have basically acted the

same way in the market as a result of greed, fear,
ignorance and hope - that is why the numerical
formations and patterns recur on a constant basis.

-Jesse Livermore
 Second Meeting Agenda

• Shorting

• Patterns, Trends and Volume

 Shorting
• Making money when a stock or market falls
• Selling high and buying back the stock at a
cheaper price, in the case of the stock market
• For futures it is literally going short
– Zero-Sum game – a market term that means there is
no value gained in the market, for every dollar that
you make, someone lost…but for every dollar that
someone lost you can make
 Why should anyone go short
• Some people say…
– The market takes the stairs up and the
elevator down
• Think about that statement
LDK
YHOO
MER
Trends
Reversals
 Volume
• Number of shares traded in a given period
of time
• Used to measure the worth of a market
move
• If prices make a strong move in either
direction, the perceived strength of that
move depends on the volume
• Higher volume indicates greater
significance
Consolidation
 Consolidation
• Usually occurs after price movement
• Period of indecision
• Trades within a tight price range
• Volume should decrease within the
consolidation period
• The stronger the consolidation, the
stronger the potential move
 Support
• A price level, trend line, moving average
etc
• A price level that the stock has historically
been unable to break below
• A level where a lot of buyers tend to enter

• Reconfirmed or broken
Support
 Resistance
• Opposite of support
 Patterns
• Pullbacks
• Triangles
• High/Low Base
• Flags
• Head & Shoulders
• Double Tops / Double Bottoms
• Wedges
 Pullback

Pullbacks occur in trend channels. Buy at channel support sell at channel resistance.
Ascending Triangle
Descending Triangle
Symmetrical Triangle
Pennant
High Base
Low Base
Bull Flag
Bear Flag
Head & Shoulders
Inverse Head & Shoulder
Double Top
Double Bottom
Multiple Top / Multiple Bottom
Falling Wedge
Rising Wedge
 Closing

• Learn to recognize these patterns.

Practice makes perfect, a trained chartist
can recognize patterns in a chart in under
3 seconds

• Next meeting we will review trends &

patterns and start talking about Indicators