1. www.elana.net Using Technical Analysis in Securities Trading Ivaylo Penev, CFA Portfolio Manager, ELANA Fund Management

2. www.elana.net What is Technical Analysis? Method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume. Market action is defined by:  Price action  Volume  Open Interest

3. www.elana.net What is Technical Analysis? Price action – price dynamics during a period Volume – the amount of shares/contracts traded for a period Open Interest – the number of options/futures contracts that are not closed or delivered on a particular day

4. www.elana.net Premises of Technical Analysis  Price movements represent all the information available  Prices move in trends  History repeats itself or as Mart Twain said – History does not repeat itself, but it often rhymes

5. www.elana.net Chart Types  Line charts  Bar charts  Candlestick charts  Dot charts  Point and figure charts

6. www.elana.net Chart Types - Line

7. www.elana.net Chart Types - Bar

8. www.elana.net Chart Types - Candle

9. www.elana.net Candlesticks

10. www.elana.net Technical Analysis in Practice  Trend lines  Support and resistance level  Chart patterns – continuation and reversal  Indicators  Other tools

11. www.elana.net Trend lines - upward

12. www.elana.net Trend lines - downward

13. www.elana.net Support and Resistance levels - Definition  Support level – in a down move support is the level where price tends to stop it’s fall at least temporary  Resistance level – the opposite of support, in an up move this is the level where price tends to stop it’s rise at least temporary  Once broken support levels turn to resistance levels and vice versa

14. www.elana.net Support and resistance levels

15. www.elana.net Reversal Patterns - Doji

16. www.elana.net Reversal Patterns - Doji

17. www.elana.net Reversal Patterns - Doji

18. www.elana.net Reversal Patterns – Head and Shoulders

19. www.elana.net Reversal Patterns – Double Tops

20. www.elana.net Reversal Patterns –Double Bottoms

21. www.elana.net Indicators – Moving Average

22. www.elana.net Indicators – Bollinger Bands

23. www.elana.net Fibonacci Retracements

24. www.elana.net Final Words  Technical vs. Fundamental Analysis or Technical + Fundamental Analysis  Combinations of Indicators  The Trend is Your Friend  A triple top or bottom is a failed double top or bottom

25. www.elana.net ЕLANA Fund Management Sopharma Business Towers 5, Lachezar Stanchev str., tower B, Sofia 1756 tel.: +359 2 81 000 40, fax: +359 2 95 815 23 fund_management@elana.net