【E*Tradeセミナー受講メモ】Chart Analysis 1 – 4 (2021年2月8日～2月11日開催)

E*Tradeのオンラインセミナー「Chart Analysis」シリーズ（2021年2月8日～2月11日開催）の受講メモです。「第1回目：Support, Resistance, and Trend」、「第2回目：Moving averages」、「第3回目：Price patterns」および「第4回目：Indicators and oscillators」が各回のテーマでした。とりあえずセミナー受講メモということで英語のままになっています。

0.　受講したセミナー

主催：E*Trade
タイトル・セミナー開催日・オンラインセミナーサイトのアドレス:

• Chart analysis 1: Trend, support, resistance（2021年2月8日)
  (https://us.etrade.com/knowledge/events/webinars/chart-analysis-1-02082021)
• Chart analysis 2: Moving averages (2021年2月9日)
  (https://us.etrade.com/knowledge/events/webinars/chart-analysis-2-02092021)
• Chart analysis 3: Price patterns（2021年2月10日)
  (https://us.etrade.com/knowledge/events/webinars/chart-analysis-3-price-patterns-02102021)
• Chart analysis 4: Indicators and oscillators（2021年2月11日)
  (https://us.etrade.com/knowledge/events/webinars/chart-analysis-4-indicators-and-oscillators-02112021)

セミナー受講メモということで英語のままになっています。時間ができたときにこれらのセミナーをネタに日本語の記事にするかもしれませんが、いつになるか分かりません。まずは興味のあるセミナーをどんどん聞いてから決めていきたいと思っています。ちなみに背景がピンクになっているところは個人的に重要（暗記したい）と思った箇所、水色になっているところはテクニカル分析の本がセミナー中に紹介された箇所、緑色は関連するセミナーに関する備忘録です。

実際のプレゼンテーションマテリアルは、チャートを多用していますがそれらは以下に含まれていないので見づらいと思います。以下の記事でも紹介しましたが、E*TradeのセミナーはE*Tradeに口座を持っていない人でも聴講可能なので、興味のある人は実際のセミナーを聴講してみてください。

アメリカ投資入門：E*Trade主催のセミナーを使いこなす（2021年版）

テクニカル分析とオプションの勉強をし直そうと思い立ち、E*TradeのWebinarを聞き始めました。どのセミナーをどの順番で聞くべきか整理するためにリンク集を作ってみたのでシェアしたいと思います（2020年度中にも一度作りましたがほとんどがリンク切れになってしまったので新しい日程のものに入れ替えました）。いずれのセミナーもE* Tradeの口座がなくても受講可能なので、興味のある方は是非受講してみてください。また、直近のセクター別のマーケットの動きやアナリストがアップグレードした銘柄を題材にしてチャートの読み方を学びたい人は、毎週開催中のCharting the markets（毎月曜日)とStocks on the move（毎火曜日）もお勧めです。

junkurema.com

2021.07.02

1.　Chart Analysis 1: Support, Resistance, and Trend

Goal: (1) Learn to read and interpret charts
(2) Identify trend, support, resistance, and breaks
(3) Look for trade set-ups using support, resistance, and breaks

1.1　Why study stock charts?

1.1.1　Why study stock charts?

“Chartists” believe there are patterns in stock prices that can be identified and profitably traded.

• Sock prices move in trends
  • Prices tend to move in persistent trends
  • Price results from supply and demand
  • Supply/demand is influenced by rational and irrational actions by investors

• Trends change direction
  • Trends change when supply and demand shift
  • Charts can show changes in supply and demand
  • Some chart patterns tend to repeat themselves

1.1.2　Investor cycology? From euphoria to fear

Optimism –> Excitement –> Thrill –> Euphoria –> Anxiety –> Denial –> Fear –> Desperation –> Panic –> Capitulation –> Despondency –> Depression –> Hope –> Relief –> Optimism

1.1.3　Why use stock chart analysis?

• Price is real-time, objective, and unambiguous
• Investors make money from price changes, mostly
  • Yes dividends too
• Charts help identify periods of euphoria and fear
  • Euphoria leads to “tops”
  • Fear is strong at market “bottoms”
• Charts let a trader plan reasonable price targets and logical stop-loss points

1.2　Mountains, bars, and candles

• Line charts plot the closing price
• Mountain charts plot the closing price
• Bar charts use four prices (Open, Close, High, Low)
• Bar chart, red-green
  • Green bar: Stock up for day
  • Red bar: Stock down for day
• Candlestick charts use four prices (Open, Close, High, Low) => separate seminar

1.3　Trends and trend lines

• The trends: Primary, secondary, and minor — 10-year weekly open high low close
  • The primary trend is long term
  • Secondary trends can be with or against the primary trend
  • Minor trends are shortest and influenced by secondary trend
• Trends within trends — 1-year daily open high low close
• Trends within trends — 10-day 10-min open-high-low-close
• Drawing trend lines — subjective

1.4　Support and resistance

• Support and resistance from trend lines
  • Uptrends have higher lows and higher highs
    • draw trend lines across lows
    • Uptrend lines are expected to provide support
  • Downtrends have lower highs and lower lows
    • Draw trend lines across highs
    • Downtrend lines are expected to provide resistance

• Support and resistance: Previous highs and low
  • Resistance: Price retreats from previous high(s)
  • Support: Price bounces off previous low(s)

1.5　Breaking support or resistance

• When a stock breaks through resistance or support it may point to a trading opportunity
• Break outs can apply in any timeframe

1.6　Three trade set ups

(1) Trade set-up: breaks out, tests, and holds

1. The break out
2. Test and hold –> Resistance can become support in a “role reversal”

(2) Trade set-up: At support in uptrend

1. Trend line established
2. Stock settles back to trendline and holds
3. Entry when stock rises from trend support

(3) Trade set-up: Breaks downtrend resistance

1. Stock under resistance in downtrend
2. Stock breaks above trendline and makes higher low
3. Entry when stock rises from the higher low

1.7　Two more things

Signals will not be 100% accurate — The chartist trades on probability
So…controlling loss is necessary — Exit losers with discipline

1.8　Takeaway

Plot trend lines, support, and resistance on your charts to identify breaks, and plan trade entry and exit.

2.　Chart Analysis 2: Moving Averages, Basic and More

Goal: Learn how to interpret moving averages to inform your trading strategy, identify potential price targets, and manage trading risk.

2.1　Moving averages and the prevailing trend

2.1.1　Moving averages and trends

• First applied to stock prices in 1960s
  • A rocket scientist from Jet Propulsion Laboratory (JPL)
• Slope of moving average identifies trend direction
• Length of moving average points to trend length
• Moving averages can identify trend changes
• Moving averages can provide support and resistance

2.1.2　What is a moving average?

Example: 10-day moving average
Add last 10 daily closing prices, divide sum by 10
　　　　（P10 + P9 + P8 + P7 + P6 + P5 + P4 + P3 + P2 + P1）/10

• Smooths price action, changes direction slowly
• Stock crossing moving average signals trend change
• Moving averages can provide support and resistance
• An automatic trend line?

2.1.3　Moving averages and trend length

Moving average period	Typical trend length?
10-day	2-20 days
50-day (10-wk)	2-20 weeks
200-day (40-wk)	2-20 months

2.2　Conditions and signals from moving averages

2.2.1　Important conditions

Stock crosses moving average	• Potential trend change • Does stock test and hold?
Faster moving average crosses slower moving average	• Potential trend change • Does stock test and hold?
Stock bounces off an upward trending moving average	• Support, potential buy • Trend-following position
Stock retreats from a downward trending moving average	• Resistance, potential sale • Sell short to follow trend
Stock is extended far from a moving average	• Look for mean reversion • Exit, or countertrend entry

2.2.2　Examples

• Stock crosses a moving average
  • Aug 2016: MU crosses and holds above 200d MA — > buy signal
  • Aug 2018: MU crosses below 200d MA –> sell signal

• Moving averages cross
  • Dec 2018: 10d MA crosses below 50d MA –> sell signal
  • Jul 2019: 10d MA crosses above 50d MA –> buy signal

• Support from a moving average
  • Aug 2017: Support near 200d MA — opportunity to enter
  • Feb 2018: Support near 200d MA — opportunity to enter

• Resistance from a moving average
  • Feb 2019: Resistance at 50-day MA — opportunity to liquidate
  • Apr 2019: Resistance at 50d MA — opportunity to liquidate

• Support from a moving average
  • 50-day crosses 200-day –> Stock rides support from 50-day

• Support from a moving average
  • 10-day crosses 50-day –> Stock rides support from 10-day

• Caution in sideways markets
  • Beware the whipsaw: Choppy sideways markets can generate repeated, and unprofitable, signals

• Trading range support and resistance
  • Apply support and resistance analysis in sideways markets

2.3　Advanced moving average tools

2.3.1　Moving average envelopes

MA envelopes can help identify support and resistance — Adjust to find best fit
–> can be used to decide potential exit point

• Ex. MA envelopes and trending stocks
  • Entry on cross of 50-day MA
  • Upper boundary presents resistance and can define short-term targets

2.3.2　Weighted moving average

• Gives greater weight to recent prices
• Most recent price x 10, next x 9, and so on
• Divide by total of weights

10-day weighted moving average
= (10 x Price t-1 + 9 x Price t-2 + … 1 x Price t-10)/ (Sum of weights (=55 for 10 days))

2.3.3　Exponential moving average

• Speeds up direction changes
• Gives greater weight to recent prices

2.3.4　Moving average “ribbons”

• Nine moving averages
• Five-day increments from 10d to 50d

–> When the ribbon pinches/folds a trend change is indicated

2.4　Takeaway

• Incorporate moving averages into your chart setup and analysis
• Focus on moving averages that align with your preferred hold time
• Adopt Power E*TRADE for robust charts and trading functionality

3.　Chart Analysis 3: Price Patterns

Goal: Learn how to identify chart patterns to inform your trading and risk management strategy

3.1　Classic stock chart patterns

3.1.1　About chart patterns

• Visual recognition of recurring patterns
  • Subjective interpretation
• Part of the earliest work in technical analysis
  • Edwards and Magee, Technical Analysis of Stock Trends, 1948
  • Pre-computerization; paper and pencil!
• Patterns can be bullish or bearish indications
• Patterns can indicate trend reversal or continuation

3.1.2　Why look for patterns in price charts?

1.　Stock prices move in trends
• Prices tend to move in persistent trends
• Price results from supply and demand
• Supply/demand can be rational or irrational

2.　Trends change direction
• Trends change when supply/demand shifts
• Charts show changes in supply and demand
• Some identifiable chart patterns may repeat

Book referenced [Link to Amazon.com]: Technical Analysis of Stock Trends 11th Edition (by Robert D. Edwards, John Magee, W.H.C. Bassetti)

3.1.3　Head and shoulders: Bearish reversal

1. Stock makes three highs; middle (the “head”) is higher than the shoulders
2. Intermediate lows identify the “neckline” of the pattern
3. Stock breaks neckline, signals lower prices
4. Does price continue lower, or ? pop back to resistance at neck? <– entry point
5. Height of pattern defines potential target price

3.14　Inverse head and shoulders: Bullish reversal

1. Price makes three intermediate lows; middle one lower than the first or third
2. Price breaks above neckline
3. Does price pull back to neckline and hold above?

3.1.5　Double bottom: Bullish reversal

1. Price holds twice in same area after a downtrend
2. Price breaks above most recent secondary high

What next?
a) Stock continues higher
b) Pulls back, bounces higher
c) Falls below break, then trends higher
d) Pattern fails, downtrend resumes

WARNING LABEL: Any pattern can fail, so sound risk management is a vital part of trading strategy!

3.1.6　Rectangle pattern: Bullish continuation?

1. Stock trading between parallel support and resistance
2. Stock breaks above overhead resistance
3. Does it pull back to the breakout and hold above?
4. May see a shortfall to support before the breakout

3.1.7　Triangles: Continuation or reversal?

• Could be continuation or reversal （Battle of sentiment）
• Wait until its resolve itself.
• Breakout usually occurs before the triangle ends

3.1.8　Cup with handle: Bullish continuation

1. After clear up trend, stock forms wide, rounded consolidation base; this is the “cup”
2. The handle is tighter, shallower consolidation (=handle)
3. When stock breaks above the high of the handle a buy signal is generated

Book Referenced [Link to Amazon.com]: How to Make Money in Stocks: A Winning System in Good Times and Bad, Fourth Edition (by William O’Neil)

3.2　Short-term and candle patterns

3.2.1　Two-bar reversal: A short-term pattern

1. Downtrend in place
2. Two bars, similar length, similar lows, bar: 1 closes lower half, bar 2 upper half
3. Pattern confirmed with higher low –> entry point

1. Clear uptrend in place
2. Two bars, similar length, similar highs, bar 1 closes upper half, bar 2 lower half
3. Pattern confirmed with lower high

3.2.2　Candlestick patterns

3.2.3　Candle body length shows conviction

• Length is relative to other candles
• Long body candles
  • Price moved with conviction
  • Green: Buyers controlled
  • Red: Sellers controlled
• Small body candles
  • Lack of conviction
  • Neither buyers nor sellers prevailed
  • Color less important in small bodies

3.2.4　Candle pattern: Engulfing

• Bullish engulfing pattern — Long green candle “engulfs” a prior red candle, pointing to short-term higher prices
• Bearish engulfing pattern — Long red candle “engulfs” a prior green candle, pointing to short-term lower prices

3.2.5　Candle pattern: Hammer (bullish)

• Price in clear down trend
• Hammer shape
  • Small body
  • Long lower shadow
• Look for near support
• Signal confirmed with long
  • green candle after hammer

3.2.6　Candle pattern: Shooting star (bearish)

• Price in clear up trend
• Candle shape
  • Small body
  • Long upper shadow
• Look for near resistance
• Confirmation from long red candle after shooting star

3.2.7　There are many candlestick patterns!

More candle patterns include Abandoned baby, Hanging man, Dark cloud cover, Piercing line, Morning star, Evening star, Three soldiers, Three crows, Inside down, Inside up, Dragonfly doji, Gravestone doji, Stick sandwich.

参考：2021年5月19日開催のオンラインセミナー「Using Candlestick Charts」で、Hanging Man, Spinning Top, Falling Three, Abandoned Baby, Bearish Engulfingについて説明しています。

Book Referenced [Link to Amazon.com]: Japanese Candlestick Charting Techniques, Second Edition 2nd Edition (by Steve Nison)

3.3　Takeaway

Chart patterns are technical indicators that may help identify if a trend is reversing or continuing, and learning to recognize them can enhance your chart analysis

4.　Chart Analysis 4: Indicators and Oscillators

Goal: (1) Understand the source and application of technical indicators and oscillators
(2) Use one or two technical indicators to confirm trend reversal or continuation

4.1　RSI: Relative Strength Index

4.1.1　RSI: Relative Strength Index

Wilder’s RSI (Welles Wilder, 1978)

• RSI is not relative strength to the market
• RSI measures the magnitude of recent gains and losses
• RSI value oscillates between 0 and 100
• Stock is overbought when RSI is over 70
• Stock is oversold when RSI is below 30
• Look for divergence between RSI and price action

Note: E*Trade preset RSI 80 and 20 -> change to 70 and 30

4.1.2　RSI calculation and graph

• 14 Periods — Days, weeks, months, intraday
• RS Ratio = (Average gain on up days)/ (Average loss on down days)
• RSI = 100 – (100/ (1 + RS Ratio))

4.1.3　RSI extremes: Overbought and oversold

4.1.4　RSI divergence: Precursor to trend change?

(1) Positive divergence:
• RSI makes higher lows
• Price makes lower lows

(2) Negative divergence:
• RSI makes lower highs
• Price makes higher highs

4.2 　Stochastic oscillator

4.2.1　Stochastic oscillator

Measures current price relative to a recent range, typically 14 days

• 14 Periods　– Days, weeks, months, intraday
• Position in range “%K” = (Current close – 14-day low) / (14-day high – 14 day low) x 100
• Two lines plotted
  • Fast line: 3-day average of %K
  • Slow line: 3-day average of fast line

4.2.2　Stochastic identifies short-term swings

4.2.3　Stochastic at short-term lows

4.3　On Balance Volume

4.3.1　On Valance Volume

• Cumulative calculation
  • Actual value not important
  • Daily, weekly, monthly, intraday
• Add volume if stock up, Subtract if stock down
• Divergence from price may signal trend change
• OBV should confirm price move

4.3.2　OBV divergence precedes trend change

1. Stock in uptrend, makes new high
2. OBV diverges, fails to confirm
3. Stock breaks support, enters downtrend

4.3.3　Confirmation from OBV

1. Stock breaks out from downtrend
2. On balance volume 2 makes new high

4.4　So many to explore?

4.4.1　Many similar oscillators

• RSI
• Pretty Good Oscillator
• Ultimate Oscillator
• Chande Momentum Oscillator

4.4.2　Selected volume related oscillators

• On Balance Volume
• Money Flow Index (14)
• Chikin Money Flow (20)
• Accumulation/Distribution (n)

4.4.3　Some colorful oscillators

• Awesome oscillator
• Gator oscillator
• Rainbow oscillator

4.4.3　And then there are these!

• Prime number oscillator
• Fractal Chaos oscillator

4.5　Takeaway

• Dozens of technical indicators exist to help confirmation and analysis of price action
• Oscillators are helpful in trading ranges, so traders must determine trend condition when using them
• “Mechanical signals based on them alone have not proven successful because the oscillator behavior depends on the underlying trend.”

Book Referenced [Link to Amazon.com]: Technical Analysis: The Complete Resource for Financial Market Technicians 3rd Edition (by Charles Kirkpatrick II, Julie Dahlquist))　

4.6　MACD (from Q&A session)

• when the faster line croses the slower line, that’s an uptrend signal
• when it crosses down and through its downtrend signal
• histogram shows difference between faster line and slower line
• MACD (12, 26, 9) means using moving average of 12 period (=faster line), 26 period (=slower line) and 9 is a smoothing factor

4.7　Book Recommendation for Technical Analysis (from Q&A session)

Two books recommended by Mr. Dave Whitmore, Senior Strategist, Investor Education, E*TRADE Securities

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