1. TAREK AMYUNITECHNICAL ANALYSIS1 TECHNICAL ANALYSIS AND CHARTING

2. TAREK AMYUNITECHNICAL ANALYSIS2 TECHNICAL ANALYSIS AND CHARTING Tarek.Amyuni@ceram.fr 04 93 95 45 97 OFFICE 268 (SKEMA 2) Assistant : Gisele Masante (Theseus) 04 93 95 45 01 WWW.globalfinance.org

3. TAREK AMYUNITECHNICAL ANALYSIS3 BASIC PRINCIPLES

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11. TAREK AMYUNITECHNICAL ANALYSIS11 1 Tiens ! Les cours montent. Il faudrait suivre le marché 2 J ’ai loupé la consolidation mais si j’attends trop je ne profiterai jamais de la hausse J ’ACHETE 3 J ’ai bien fait de ne pas attendre 4 C ’est bon ! Je rachète le double ! A ce prix-là, c ’est une affaire ! 5 Aïe ! Dès que je retrouve mes cours, je revends 6 Mais c’est pas possible ! Ça ne peut pas durer comme ça ! 7 Ca suffit ! Je coupe tout 8 J ’ai bien fait de tout vendre ! 9 De toute façon ça va rebaisser ! 10 10 Eh Eh ! Je l ’avais bien dit 11 Mais que se passe-t-il ? 12 Encore des fous qui vont se faire avoir ! 13 Et zut ! j’y vais quand même, c ’est finalement moins cher que la première fois ! Ce qu’il ne faut surtout pas faire en bourse !

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14. TAREK AMYUNITECHNICAL ANALYSIS14 Should I buy today? What will prices be tomorrow next week, or next year? Wouldn't investing be easy if we knew the answers to these seemingly simple questions? Alas, if you are taking this class in the hope that technical analysis has the answers to these questions, I'm afraid I have to disappoint you early—it doesn't. However, if you are taking this class with the hope that technical analysis will improve your investing, I have good news--it will!

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16. TAREK AMYUNITECHNICAL ANALYSIS16 BASIC PRINCIPLES Technical Analysis is not perfect… In technical analysis, we are dealing in probabilities Do not believe advertisers promising consisting easy and fast profits based on technical analysis Prices are determined by ……………….

17. TAREK AMYUNITECHNICAL ANALYSIS17 Prices are determined by knowledge, hopes,fears and expectations of those already in the market and those thinking of coming in. It's the attitude of people that is important.

18. TAREK AMYUNITECHNICAL ANALYSIS18 Securities never sell for what they are worth but for what people think they are worth Market participants look ahead, anticipate future developments and take action now… But not all market participants get the news and act at the same time.

19. TAREK AMYUNITECHNICAL ANALYSIS19 THE SUM OF THE ATTITUDE OF ALL THE PARTICIPANTS AND POTENTIAL PARTICIPANTS IS REFLECTED IN ONE THING: THE PRICE

20. TAREK AMYUNITECHNICAL ANALYSIS20 That's why markets bottom when news is bad and peak when news is good !

21. TAREK AMYUNITECHNICAL ANALYSIS21 LES TENDANCES ONT TENDANCE A SE PERPETRER

22. TAREK AMYUNITECHNICAL ANALYSIS22 The art of technical analysis is to try and identify trendtrend changes at an early stage and maintain an investment until the evidence shows or proves that the trend has reversed.

23. TAREK AMYUNITECHNICAL ANALYSIS23 IN TECHNICAL ANALYSIS THE EVIDENCE IS PROVIDED BY :

24. TAREK AMYUNITECHNICAL ANALYSIS24 Once a new trend emerges, always assume the prevailing trend is still in force until enough indicators have given reversal signals

25. TAREK AMYUNITECHNICAL ANALYSIS25 3 Types of Trends Short-term Trend : 3 to 6 weeks Intermediate trend : 6 weeks to 9 months Long-term Trends (Primary Trend) : 9 months to 2 years Secular Trends : 5 to 25 years

26. TAREK AMYUNITECHNICAL ANALYSIS26 It's as well to remember that technical analysis is far from perfect even when correctly interpreted LET'S MOVE ON TO SEE THE DIFFERENT KIND OF CHARTS…

27. TAREK AMYUNITECHNICAL ANALYSIS27 4 MOST POPULAR TYPE OF CHARTS Bar charts Line chart Point and figure chart Candlestick charts

28. TAREK AMYUNITECHNICAL ANALYSIS28 BAR CHART opening price closing price HIGH LOW

29. TAREK AMYUNITECHNICAL ANALYSIS29 THE ADVANTAGE OF BAR CHARTS IS THAT THEY VISUALY GIVE YOU A LOT OF INFORMATION : high, low, open, close THE MOST IMPORTANT PARTS OF THE BARCHART ARE THE OPENING AND CLOSING PRICES CARACTERISTICS OF BAR CHARTS UNDERNEATH MOST CHARTS, YO WILL SEE OTHER BARS: THEY INDICATE THE VOLUME : COMPONENT WHICH IS INDEPENDENT OF PRICE

30. TAREK AMYUNITECHNICAL ANALYSIS30 The highs and lows are ignored in line charts Only the closing prices are considered. The line follows the closing prices. Easier to spot the prevailing trend and not concerned about the intra-day trading activities Line charts can be plotted for longer period of time since they need less space on the chart CARACTERISTICS OF LINE CHARTS

31. TAREK AMYUNITECHNICAL ANALYSIS31 POINT AND FIGURE CHART

32. TAREK AMYUNITECHNICAL ANALYSIS32 As I mentioned above, P&F charts focus only on price action. Looking at this P&F chart, you can see that prices were initially contained between a support level at 114 and a resistance level at 121. When prices broke above the resistance level at 121 (the long column of Xs),that level became the new support level. This new support level eventually failed (the long column of Os), prices re-tested the support at 114, made a small rally, and then fell below the 114 support level.

33. TAREK AMYUNITECHNICAL ANALYSIS33 POINT AND FIGURE CHARTS Point & Figure ("P&F") charts differ from traditional price charts in that they completely disregard the passage of time and only display changes in prices. Rather than having price on the y-axis and time on the x-axis, P&F charts display price changes on both axes.

34. TAREK AMYUNITECHNICAL ANALYSIS34 CANDLESTICK CHARTS

35. TAREK AMYUNITECHNICAL ANALYSIS35 CARACTERISTICS OF CANDLESTICKS CHARTS Japanese origin Real body : when opening is higher than the close More emphasis on opening and closing prices than bar charts Disadvantage : they take a lot of space on the chart Useful tool for short-term traders

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37. TAREK AMYUNITECHNICAL ANALYSIS37 The term "CHARTING" refers to the process of interpreting charts, displaying price and/or volume The term "TECHNICAL ANALYSIS" refers to a host of indicators and methods two of which are price and volume

38. TAREK AMYUNITECHNICAL ANALYSIS38 LET’S MOVE ON…………