Which Direction is Price Trending?
Why Price Trend Direction Matters:
Is the current Price Uptrend or Downtrend going to Continue in its existing direction; or is the current Price Trend likely to Reverse.
Use in conjunction with Trend Strength and Momentum to determine whether to Sell a Stock Position in a Trend Reversal.
What is the Strength of the Price Trend?
Is the Strength of the current Price Trend increasing or decreasing? The strength of a Price Trend is a measurement and a determination as to how forceful and sustained a Price Movement is.
Why Price Trend Strength Matters:
If Price Trend is increasing in strength, the stock is gaining momentum in its current direction, supported by rising trading volume or strong market sentiment. If it is decreasing, the stock is losing momentum, signaling a potential Trend Reversal or Consolidation phase.
Why Price Momentum Matters:
If Momentum is increasing, the Price Trend is accelerating and will continue in its current direction. If Momentum is decreasing, the Price Trend is weakling, signaling diminishing investor conviction and a potential Price Reversal or Consolidation.
Why the Direction of Volume Matters?
The Direction of Volume is used to confirm a Price Trend; Signal a potential Price Reversal or Consolidation; Identify a Price Breakout or False Signal.
What is the Momentum of the Price Trend?
Identify the speed and force of a stock's movement in its current direction—whether Price is rising (bullish), falling (bearish), or staying relatively flat.
Volume represents the number of shares traded during a defined Timeframe. Analyzing the direction of Volume can facilitate a determination as to whether a Price Trend is gaining or losing momentum. Also, buying or selling pressure,(whether Price is Trending Bullish or Bearish), can be assessed from knowing the Volume Trend and Price Trend of a stock.
Which Direction is Volume Trending?
What is the Support Level of a Stock?
The Support Level of a stock is the Price where a stock typically ceases to Decline and begins an Uptrend. Support is where Demand exceeds Supply and the number of Buyers exceeds the number of Sellers.
What is the Resistence Level of a Stock?
The Resistance Level of a stock is the Price where a stock typically ceases to Uptrend and begins to Decline. Resistance is where Supply exceeds Demand and the number of Sellers exceed the number of Buyers.
Is a Stock in a Continuation Pattern?
A stock Continuation Pattern is a Technical Chart Pattern that signals an existing Price Trend is likely to continue after a Consolidation period. A Consolidation Pattern indicates that the Stock Price is trading within a tight range before resuming the previous Price Trend, instead of reversing direction.
Is a Stock in a Reversal Pattern?
A stock Reversal Pattern is a Technical Chart Pattern that signals an existing Price Trend is likely to reverse after a Consolidation period. A Reversal Pattern indicates that the Stock Price is trading within a tight range reversing the previous Price Trend, instead of continuing in its direction.
What are the Cognitive Psychological Biases of the Herd Mentality That Are Likely to Determine Market Behavior?
Identify potential positive and negative influences that can potentially determine the Market Behaviour of the Herd Mentality toward a specific Stock; and toward a Stock Market Sector; and toward a Stock Market Index. It is important to be aware of what positive or negative Catalyst events may affect a specific stock; or a stock sector; or a stock Index insofar as determining the Psychological Bias of the Herd Mentality.
Why Support Level Matters:
A Support Level typically signals a Price Reversal and a Buy Entry Point. Alternatively, if Price declines below a Support Level, this is typically a signal, (or a Breakout), of a further Price decline.
Why Resistance Level Matters:
A Resistance Level typically signals a Price Reversal and a Sell Exit Point. Alternatively, if Price increases above a Resistance Level, this is typically a signal, (or a Breakout), of a further Price Uptrend.
Why a Continuation Pattern Matters:
A Continuation Pattern typically confirms the previous Price Trend is likely to continue after a Consolidation phase. A Continuation Pattern typically indicates a Breakout and Entry Point. A Continuation Pattern typically provides a Price Target on the Buy and Sell Side of a Trade based on the formation of the Continuation pattern.
Why a Reversal Pattern Matters:
A Reversal Pattern typically signals the previous Price Trend is likely to reverse after a Consolidation phase. A Reversal Pattern typically signals a change of a Price Trend before it occurs. A Reversal Pattern identifies an Exit Point if holding a Stock Long; or a Breakout and Entry Point to Short a Stock. A Reversal Pattern facilitates Risk Management by determining a Stop-Loss Level near a reversal point.
Why Understanding the Cognitive Psychological Biases of the Herd Mentality That Are Likely to Determine Market Behavior Matters:
Substantive Catalyst Events if positive, will cause a Stock, a Stock Sector; or a stock Market Index to Uptrend. Conversely, a negative Catalyst event can cause a Stock, a Stock Sector; or a stock Market Index to Downtrend. Examples of Catalyst Events include: Quarterly Earnings Report Print releases; Positive or Negative Guidance; Analyst Upgrades or Downgrades; Economic Data Print releases; changes of Economic Trade Policy; Product Innovations; Acquisitions & Mergers; Industry Growth Trends; Analyst Upgrades/Downgrades; Regulatory Approvals or Crackdowns; Geopolitical Events.
