1. Academy #8 Technical Analysis Speakers: Charles & Daniel Get connected to B&R Beurs @ 1

2.  Charles-Antoine Bory ◦ Board member + chairman Audacity ◦ Swiss: good with other people’s money ◦ Many years of investment experience  Daniel Göttmann ◦ Chairman STCM ◦ German: paying the bill in a few years ◦ Many years of investment experience

3.  Introduction  Volatility  Charts  Basic patterns  Trend indicators  Momentum indicators  Advanced chart patterns  Links  Conclusion

4.  Graphical analysis  “In finance, technical analysis is a security analysis discipline used for forecasting the direction of prices through the study of past market data, primarily price and volume.” Wikipedia  Technical analysis is more concerned with finding cues about the market micro structure!  Belief that the historical performance of stocks and markets are indications of future performance.

5.  Never forget your fundamental analysis!  Use technical analysis as complement  Combination is the key!

6.  Identifying securities to buy/sell  Timing of buy and sell orders  Drawing in your professional life

7.  Volatility is a measure for the variation of the price of a financial instrument over time ◦ Standard deviation ◦ A higher volatility implies a riskier asset ◦ Volatility varies over time ◦ Volatility typically high in bear markets

8.  Negatively correlated with price

9.  Stocks: volatility goes up, as prices go down  Implication for options?  Want to trade volatility? Use the VIX

14.  Price level at which demand is thought to be strong enough to prevent the price from declining further

15.  Price level at which selling it thought to be strong enough to prevent the price from rising further

16.  Resistance becomes support (and vice-versa)

18.  Buy signal at (3)

19.  Sell signal at (3)

24.  Golden Cross: fast moving average crosses slow moving average from below ◦ Buy signal! ◦ Typically comes with high trading volumes

25.  Dead Cross: fast moving average crosses slow moving average from top ◦ Sell signal! \\

26.  1 moving average (e.g. 20 days) +/- 1 standard deviation  Bands as support/resistance  Adjusts to market conditions  Contains ~88% of price movements

27.  Moving Average Convergence Divergence  MACD=12d EMA – 26d EMA, 9d EMA (signal line)  Trend + momentum  Crossover

29.  Relative Strength Index  0<RSI<100  RSI>70 => overbought (=> sell)  RSI oversold (=> buy)

30.  Similar to RSI  Used to forsee reversal  20<STO<80

31.  Rate of Change (ROC)  Commodity Channel Index (CCI)  StochRSI  TIX  Ulitmate Oscillator (ULT)  Aroon […]

34.  Most reliable trend-reversal pattern ◦ Detectable by volume peaks 1.Rises to a peak and subsequently declines. 2.The price rises above the former peak and again declines. 3.Price rises again, but not to the second peak, and declines once more.

35.  Ascending  Descending  Use a price range

37.  The more volume the better ◦ Lower transaction costs (bid-ask spread)

42.  Investopedia.com ◦ To lookup easy definitions  Bloomberg.com ◦ Click on “Index Chart” -> “Overlay” / “Indicators”  Stockcharts.com ◦ Perform technical analysis easily ◦ Explanation for each indicator ◦ All indicators available  Chartgame.com ◦ Test your knowledge and predictions!

43.  Always combine many indicators at the same time ◦ Avoid multicollinearity ◦ E.g. Candle sticks + Volatility + Volume + SMA + MACD + RSI  Focus on liquid stocks  Always use it as a complementary tool to fundamental analysis  Now, impress your investment group!

44.  Next B&R Beurs events: ◦ 13/12 at 9pm: Social drink @ Sus&Co ◦ 15/12: Deadline ABN Amro Turbo Assignment ◦ 10/01: New Year’s drink (Champagne!!)