Technical Analysis Glossary
Average Directional Index Indicates the strength of a trend. It is typically plotted with a +DMI and -DMI.
ADX1 checks for the ADX below both DMI lines and rising and the -DMI is below the +DMI. The premise here is that buyers are in control and the trend is strengthening.
ADX2 has the ADX line is on top of both DMI's and falling and the -DMI is on top of the +DMI. The premise here is that sellers are in control but the trend is weakening.
Taken from Yahoo Finance. The first number is the number of analysts that have the rating listed and the second number is total number of analysts.
Usually a continuation pattern that forms in an uptrend during a period of consolidation.
Stock Options whose strike price is exactly at or very near the prevailing price of the underlying stock.
Indicates the strength of a trend. It is typically plotted with a +DMI and -DMI.
A style of chart where the top of the vertical line indicates the highest price a stock traded at during the day, and the bottom represents the lowest price. The closing price is displayed on the right side of the bar, and the opening price is shown on the left side of the bar.
Someone who believes a stock or the overall market will decline.
Beta is the tendency of a security's returns to respond to swings in the market. A beta of 1 indicates that the security's price will move with the market. A beta of less than 1 means that the security will be less volatile than the market. A beta of greater than 1 indicates that the security's price will be more volatile than the market. For example, if a stock's beta is 1.2, it's theoretically 20% more volatile than the market.
The amount by which the ask price exceeds the bid. This is essentially the difference in price between the highest price that a buyer is willing to pay for an asset and the lowest price for which a seller is willing to sell it.
A steep and rapid increase in price followed by a steep and rapid drop in price.
A band plotted two standard deviations away from a simple moving average.
Represents a gap in the movement of a stock on high volume.
A rise in a stocks price above a resistance level or drop below a level of support. A breakout is taken to signify a continuing move in the same direction.
Someone who believes a stock or the overall market will increase.
A chart style that includes a body and a top and bottom "wick". The top of the "wick" is the high of the day and the bottom the low of the day. On an up day the top of the body is the close and the bottom the open. On a down day the top of the body is the open and the bottom the close.
A range between support and resistance that a stock trades in for a period of time.
A professional designation that confirms proficiency in the technical analysis of financial markets.
A gap in a stock price caused by normal conditions. These gaps are usually closed quickly.
A situation in which a predicted pattern moves in the direction previously indicated.
Movement of a stock price in a well defined trading level. Generally considered a period of indecision.
A consolidating pattern that is expected to move in the direction of the previous trend.
A credit transaction is one in which the net sale proceeds are larger than the net buy proceeds (cost), thereby bringing money into the account.
Position on a stock chart where the price and a technical indicator intersect.
A price pattern where the initial action resembles a cup followed by a small downtrend considered a handle.
A price graph that shows the price movement of a stock on a given day.
Buying and selling stocks on an intraday period. Day traders typically do not hold stocks overnight.
Buying and selling stocks on an intraday period. Day traders typically do not hold stocks overnight.
Buying and selling stocks on an intraday period. Day traders typically do not hold stocks overnight.
An expense, or money paid out from an account. A debit transaction is one in which the net cost is greater than the net sale proceeds.
This can be considered either positive or negative, both of which are signals of a shift in the direction of price. A positive divergence occurs when a stock price makes new lows while an indicator climbs upwards. A negative divergence occurs when a stock price makes new highs while an indicator trends down.
A candlestick pattern that indicates indecision by both buyers and sellers. The pattern forms when the opening and closing price are relatively the same.
A price pattern that indicates the drop in the price of a stock, a rebound, another drop close to the level of the previous drop, and finally another rebound. This is a bullish chart pattern.
A price pattern that indicates the rise in the price of a stock, a drop, another rise close to the level of the previous rise, and finally another drop. This is a bearish chart pattern.
When the general direction of a stock price is down making lower lows and lower highs.
A detailed description of how financial markets behave. The description reveals the mass psychology swings from pessimism to optimism and back in a natural sequence, creating specific wave patterns in price movements.
Exponential Moving Average - Similar to a simple moving average , however more weight is given to the most recent price action.
A candlestick pattern where the current days price action completely engulfs the previous days action.
Exchange Traded Fund - A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
Exchange Traded Fund - A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
A bearish candlestick pattern consisting of three candles where the first bar is a large white candlestick within an uptrend. The middle bar is a small bodied candle that closes above the the first white bar. the last bar is a large red candle that opens below the middle candle and closes near the center of the first bar's body.
A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. ETFs experience price changes throughout the day as they are bought and sold.
A gap that occurs after the rapid rise in a stock's price begins to stall. This usually represents falling demand.
Similar to a simple moving average , however more weight is given to the most recent price action.
A phrase indicating a sharp decline in a stocks price.
The F/E Score is the combination of the Financials and Estimates scores. It is designed to give an overview of the financial health of a company. Specifically, the Financials score looks at how the company has performed in the past by reviewing growth rates and other ratios to help investors discern whether the management of a company is operating wisely. The Estimates score looks at what analysts are saying about the company´s future potential. If analysts like the growth potential of a company, it will be reflected by a high estimates score.Values are expressed on a scale of 1.0 to 4.0