Trying to Understand Charts..Pls Help.

Discussion in 'Technical Analysis' started by Pashaz, Jan 2, 2006.

  1. Pashaz


    Hi Guys,
    I am a beginner in stock trading.I am trying to learn and apply some technical knowledge on the stock chart of HSBC (NYSE:HBC). Below, I am writing my understading of the HSBC chart and some points that I couldn't understand. Can someone pls comment on it, as to whether, I am right or wrong and correct me.

    Chart link is at the end of text.

    1)The Candle Stick chart is showing a down trend.
    2)Since the price is near the lower band of Bollinger Band, it suggests that the stock is getting oversold.When the price will bounce back the lower band and moves up the 20 day moving avg it will suggest a bullish trend.
    3) Trading volume is slightly more than half mark.(How should we interpret this ?)
    4)The fast(red) and slow(blue) lines lines in the MACD chart are crossing over (red crossing over blue) above the zero point (does this mean that an up trend will be starting soon?
    5) The blue line in RSI chart is between 40-50 mark, showing selling pressure.
    6) The price resistance looks like to be on 81.50 mark, can someone indicate the support mark, if it any?
    7) ROC (momentum indicator).My understanding is that if it is below the zero line, it shows that the closing price of the stock was lower than that of the previous closing price(is this interpretation correct)? I am confused with the two lines, why are there two lines red and blue. and what do they suggest?

    You can write your response in-front of each explanation. Any addition to these explanations, and suggestion on what else to consider would be very much appreciated. Thanks in advance.;MACD;RSI;ROC;&Over=BB;&MA=&EMA=
  2. Don't know much about the other indicators, but when I look at this chart I don't see a down trend. It would need to break the low it set in early december or close below your bollinger band. Basically consolidation period. I would confirm a downtrend with a close outside of the lower B band and the close below the december low. I would even consider a long position with a stop below this december low and look for it to test the upperband/81.75 area hold long for a possible breakout from that area.

  3. This chart with its technical indicators shows that it is recently bearish. But whether it will continue to go down, you have to wait and see for more confirmation, because right now it is actually more of a sideways/ consolidation of previous rally like the previous poster says. So if I were you I would probably wait for more action. Right now it's not really a meaningful, significant downwards. How to know if it's a meaningful downwards or upwards later? When it breaks the sideways channel significantly. You can see it's sideways from the shape of the MA and the BB now.
  4. Hi! Remember that there are people behind the bars/candles. It´s quantified thoughts and emotions.
  5. PashAZ;
    a]Agree with the other 3 elites, a 1 year chart,its a sideways trend [consolidate]

    z]Most all volume has been below average late DEC;
    5 year/10 year/1 year year chart is bullish /sideways[carries more weight than 100 day/10 day which are bearish/sideways ]

    $81.8 area is 5 year resistance/over head supply

    z again ] Again you could technicaly call that bearish, but sideways or barely up may be more accurate;
    on some charts ,
    price is above /bounced 50/200 day moving average:cool:

    Wisdom is profitable to direct

    Good question ;
    & remember 50/200 day moving averages like William O'Neil writes in Investrs Business Daily.:cool:
  6. There is no offense meant by this, but I think this is a problem that a lot of traders face, the unwillingness to make a desicision NOW. You can always wait for more confirmation, or (and this is the worst thing to do) wait for a pull back for a "low risk" entry point in a strong trend. So although the original poster could probably find better set up in a different stock I tried to give him advice on what to do now in this one. And yes I suppose that not entering a position is a decision in itself.

  7. See attached
  8. second try.

    See attached