Mr. Roeshink Academy of Finance Stock Charts: 101 Mr. Roeshink Academy of Finance

Resistance

Support

Trends

Trends

Moving Averages

RSI The Relative Strength Index (RSI), developed by J. Welles Wilder, is a momentum oscillator that measures the speed and change of price movements. The RSI oscillates between zero and 100. Traditionally the RSI is considered overbought when above 70 and oversold when below 30.

RSI

RSI When setting up your stock screener for RSI, if possible set it to 14 or lower Many screeners will only allow you to set it up for RSI 10, which is what you will do

Moving Average Indicator A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random price fluctuations. A moving average (MA) is a trend-following or lagging indicator because it is based on past prices.

In the investment group I belong to we follow the following moving day averages: 50 day, 100 day, 200 day, 500 day, and 1000 day Ideally look at averages of 1 year or 2 years at a minimum to make stock picking selections

The Death Cross

Investing Rules to Follow 1) When a stock or index breaks down thru the 50 day moving average it’s a “mild” buying opportunity 2) When a stock or index breaks down & thru the 50 day and 100 day moving average it’s a “better than mild” buying opportunity 3) When it breaks thru the 50 day, 100 day and 200 day moving average this is a “textbook buying opportunity”

Reasoning on 200 day average rule… The reason why 200 day average is the best textbook buying opportunity is because buying programs are instantly buying more of the stock When looking for stocks to buy, you look for stocks where the moving averages are below the price line

Mad Money Start watching Mad Money or record it each day to start understanding what the market is doing. Jim Kramer has very similar investment strategies as our investment group and you can learn a lot and gain a ton of insight 6pm each day on MSNBC

Remember this TEXTBOOK BUYING OPPORTUNITY! When each moving average is broken 50/100/200 day and the RSI hits down to 30 or below

Another rule… After a “Big Drop” in price on a stock that fits your buy parameters, make sure you wait a minimum of 3 days to see what’s happening before you act on it