The term “support” refers to the price level at which demand for a security is thought to be strong enough to prevent the price from declining further. A support level is created when the price of a security stops falling and starts to rise. This level is thought to be a floor, or bottom, at … Read more
When a stock makes a sudden move in price, either up or down, it is said to have made a break. A break in trading is when the price of a stock or other asset moves outside of its normal range. This can be either up or down, but is most often seen as a … Read more
The Fibonacci arc is a technical analysis tool that is used to predict future price movements. The Fibonacci arc is based on the Fibonacci sequence, which is a series of numbers that is often used in technical analysis. The Fibonacci sequence is created by adding the previous two numbers in the sequence together. The Fibonacci … Read more
The Accumulation/Distribution Indicator (A/D) is a momentum indicator that measures the level of buying and selling pressure in the market. The A/D line is calculated by taking the difference between the number of advancing issues and the number of declining issues and adding the volume for each period. The result is then plotted as a … Read more
Gap definition, in technical analysis, is the area between the high and the low price of a security over a period of time. A gap can be created by a number of events, such as an earnings announcement, a change in analyst coverage, or a change in the overall market sentiment. Gaps can be either … Read more
A broadening formation is a price chart pattern characterized by a series of price peaks and troughs that get progressively wider over time. The pattern is considered a bullish indicator, as it shows that prices are trending higher despite periods of temporary weakness. The broadening formation is also sometimes referred to as a “megaphone” or … Read more
The term “Trade Price Response” refers to how the market price of a security responds to the execution of a trade. A trade can be either a buy or sell order, and the price response will be different for each type of trade. For example, let’s say that you place a buy order for 100 … Read more
Down volume refers to the total number of shares traded during a given period that were sold at a price lower than the price at which they were previously traded. This is contrasted with up volume, which refers to the total number of shares traded during a given period that were sold at a price … Read more
A bear trap is a situation in which a stock price declines sharply, only to rebound just as quickly. This type of move can occur after a sustained period of selling pressure, and can often lead to further declines as investors who bought the stock on the rebound are forced to sell at a loss … Read more
The Zig Zag Indicator is a technical analysis tool used to identify market trends. The indicator is designed to filter out small price movements and only show the larger price swings. The Zig Zag Indicator is based on a simple concept: price moves in waves. The Zig Zag Indicator is designed to identify these waves … Read more
