Technical Analysis

An indicator calculated from the magnitude of price gains and losses, displayed in a range of 0-100. Generally, above 70 is considered overbought and below 30 is oversold. Often used to time contrarian trades.

A technical indicator developed in Japan, consisting of five lines: the conversion line, base line, leading span 1, leading span 2, and lagging span. The distinctive "cloud" area allows comprehensive assessment of market trends and support/resistance zones.

An indicator that shows how far the current stock price has deviated from its moving average as a percentage. A large positive deviation suggests overbought conditions, while a large negative deviation suggests oversold conditions. It is used as a reference for contrarian investing.

A line graph connecting average stock prices over a certain period. Used to understand trend direction. Analysis combines short-term (5-day, 25-day) and long-term (75-day, 200-day) moving averages.

The thin lines extending above and below the body of a candlestick. A long upper shadow indicates selling pressure at higher prices, while a long lower shadow shows buying support at lower prices. The length of shadows represents the battle between buyers and sellers during that period.

A band-shaped indicator that sets fixed percentage deviations above and below a moving average line. When the price approaches the upper band it suggests overbought conditions, and when near the lower band, oversold conditions. It can be used similarly to Bollinger Bands.

An indicator showing how far the stock price has deviated from the moving average. The larger the deviation, the more "overextended" it is considered, and a move back toward the average (mean reversion) becomes more likely. Used as a reference for contrarian trading.

A reversal pattern appearing at market bottoms, the inverse of the head and shoulders pattern. It consists of three troughs with the central one being the deepest. A break above the neckline signals a shift to an uptrend and is a powerful buy signal.

A phenomenon where a short-term moving average crosses above a long-term moving average, considered a buy signal. It suggests the market may be shifting to an uptrend, but caution is needed as false signals can occur.

A candlestick pattern analysis method attributed to Edo-period rice trader Munehisa Homma. It consists of five patterns: Three Mountains, Three Rivers, Three Gaps, Three Soldiers, and Three Methods. It is considered the origin of Japanese technical analysis.

A price level where a declining stock price is considered unlikely to fall further. It is represented by a line connecting lows where the price has bounced back multiple times. Breaking below the support line suggests further decline.

A pattern where price movements gradually narrow, forming a triangle on the chart. The upper and lower bounds converge until a significant breakout occurs in one direction. A trend tends to develop in the direction of the breakout.

The Japanese name for head and shoulders, a reversal pattern at market tops consisting of three peaks resembling Buddhist trinity statues. The central peak is the highest with lower peaks on each side. It is considered a powerful sell signal.

A type of candlestick where the open and close prices are nearly identical, forming a cross shape. It indicates that buying and selling forces are balanced, and it often appears at trend reversal points.

An oscillator indicator showing where the current price sits within the range of highs and lows over a set period. Composed of %K and %D lines, it is used to identify overbought and oversold conditions, similar to RSI.

A chart pattern where the stock price rises to near the same high twice before declining. It appears at market tops and is considered a sell signal suggesting the end of an uptrend. A break below the neckline often accelerates the decline.

A chart pattern where the stock price falls to near the same low twice before rising. It appears at market bottoms and is considered a buy signal suggesting the end of a downtrend. A break above the neckline often accelerates the rise.

A candlestick pattern where a large candle completely engulfs the previous candle. A bullish engulfing pattern is a strong buy signal, while a bearish engulfing pattern is a strong sell signal. It is the opposite pattern of the harami.

The quantity of shares traded within a certain period. Higher volume indicates greater attention to that stock. By analyzing volume together with price movements, you can assess the reliability of trends.

A phenomenon where a short-term moving average crosses below a long-term moving average, considered a sell signal. It suggests the market may be shifting to a downtrend, but like golden crosses, false signals can also occur.

A straight line connecting lows or highs on a chart. In an uptrend, lows are connected; in a downtrend, highs are connected. When prices break through the trend line, it is considered a sign of trend reversal.

A candlestick pattern where a small candle fits within the body of the preceding candle. It indicates market indecision and signals a potential trend reversal or pause. Appearing during an uptrend suggests a top, while during a downtrend it may signal a bottom.

A technical indicator that shows trend reversal points, displayed as parabolic dots on the chart. When dots are below the price it indicates an uptrend, and when above, a downtrend. It is a trend-following indicator.

A method using ratios based on the Fibonacci sequence (23.6%, 38.2%, 61.8%, etc.) along with the 50% half-retracement level to predict pullback and rebound targets. Because many traders watch these levels, they often actually function as support and resistance lines.

The volume-weighted average price that shows the average cost of transactions for the day. It is often used by institutional investors as a benchmark, and buying below VWAP is considered a favorable trade.

A classic chart reversal pattern that appears at market tops. It consists of three peaks forming a left shoulder, head, and right shoulder. A break below the neckline is considered a signal of a shift to a downtrend. It is also called "sanzon tenjo" in Japanese.

A technical indicator that draws bands based on standard deviations above and below a moving average. About 95% of prices are expected to stay within the bands, and prices moving outside suggest an abnormal value and potential reversal.

A technical indicator that uses the difference between two exponential moving averages. Buy and sell timing is determined by the crossover of the MACD line and signal line. A popular indicator that simultaneously shows trend direction and strength.

A price gap between the previous day's close and the current day's open. Gaps can open upward on good news or downward on bad news. There is a market saying that "gaps get filled," meaning prices often return to close the gap eventually.

Types of candlesticks where a bullish candle (yousen) has a close higher than the open, and a bearish candle (insen) has a close lower than the open. Bullish candles are typically shown in red or white, bearish in blue or black. Consecutive bullish candles indicate a strong uptrend.

A price level where a rising stock price is considered unlikely to rise further. It is represented by a line connecting highs where the price has been rejected multiple times. Breaking above the resistance line suggests further upside.

A chart that represents four prices (open, high, low, close) in a candle-like shape. Includes bullish (rising) and bearish (falling) candles, used to read market momentum and turning points.