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this video gets into a lot of the more conventional technical analysis indicators so we're going to walk through a bunch of charts and I realize that any chart may show you three or four different things that I want to talk about so we're just going to go to chart by chart and I'll point out some stuff as we go through them and hopefully this will give you a good idea about some of the more easier I'll say technical analysis indicators and techniques you can use to really analyze what's happening with the price of a stock all these charts are provided by big charts comm none of this is trading advice it's all opinion but let's get into it now but I want to show you on this chart is you can almost imagine a red line across here at the three dollar level that's a support level that every time the price gets away from it and starts coming back down to it you're gonna see a little bit of an uptick and how much trading volume is going on and also you see it set it round number of price three dollars a lot of less experienced investors will do this and also there be a conglomeration of a lot of the traders all trading in the same price point people sell at three they buy at three they sell at 350 375 four dollars eight dollars you get the idea you're not going to have a big buildup of people all who want to sell the shares at $3.22 they're gonna gravitate around round number pricing that's why a lot of times with thinly traded stocks like these you'll see that there will be a support level and around number of price $3 or there will be a resistance level at around number price and there's the mild resistance level here that you can see at $4 so the price was being held above 3 buy more buying demand every time the price approach that level but it also wasn't quite strong enough to get past the resistance level which is right across this $4 mark here and keep in mind this doesn't apply to every stock where I say ok a round number price around $3 could be a support level that's not what it's based on that's just what it's based on with this specific stock we're talking about in this specific chart but it is also pretty common when it comes to a lot of stocks that are as I said then we trade it but you can imagine if there was a red line here at the support level and then that red line here at the resistance level that's why the stock was range bound for a while it got harder to break into cruising altitude when it approached four dollars and got easier to maintain higher prices every time I decline towards three dollars and this is a chart of GBP now when there's a trend you'll see here this is an uptrend which then became a downtrend at any point during a trend the most likely direction for the price to go is further in the trend that it's already in so if you're looking at here wondering where it's gonna go next it's probably gonna go lower if you're looking at here you're wondering where it's probably gonna look lower and probably gonna go lower and it'll keep on doing that until eventually something happens where it breaks out of that maybe you can see that there's almost a mild support level here the 260 cent range besides this one day where there must have been a big overwhelm of a lot of selling pressure all at once which dump the spouts like that it's a temporary dip besides net there is some support of the 260 level and that would have potentially made this into a double bottom where if that's the Court did hold up and it probably is more likely to be trusted because there's more trading volume at that time you can see that generally the trading volume of this box is pretty low it's nothing major but there was a little bit of activity as a stock price approach that resistant or that support level so if it bounces off in there it's away from it and they kind of comes back to it again and bounces off in there that's a double bottom at that price and it's generally a very optimistic sign for the stock price going forward then you can see here there's a support level at 310 that's why it looks like if you took a knife you cut off all the prices all the week so the candle that the lowest price it's hitting here is at the three tenth level and it's not as though the support is all showing up at three dollars and 11 cents or $3.14 there's three dollars and two cents it's a round number of price and that's why you can put a little bit more stake into the fact that it may actually be a support level there but at the same time you've got a resistance level at 360 I don't know if you guys can see that but if you drew a red line here and red line there that's what is keeping the stock price higher above those levels and lower along these levels so that you're gonna be range bound for a while until either the stock visually it's enough momentum and upward and strength to break through the resistance level in which case the stock will probably do very well in the short term going from forward from there because it's a breakout or if the stock price collapses beneath the $3.00 10-cent support level that's a breakdown and it will probably keep on falling lower from that point now this is ONC s and you can see the support at the 90 cent range here just imagine a red line going right across that level and it's going to be showing you that the price might have approached the support level but then it responded or bounced back and then it took another run on it and bounced back and if that support level keeps on holding like that and the stock eventually does get things going in the right direction that will generally be the lowest price you'll see for the shares for a long long time now this is a gap higher you can see gap lowers gap gap downs or cap ups this is where the stock price closed then the next day it opened at a lower price than where it closed that's a gap down cap up is the opposite it opened at a price higher than when it closed the day before and you can see this huge trading volume spike this is a very thinly traded stock but there's a huge trading volume spike along with the gap higher and it wasn't based on earnings as you see the earnings were higher but they were actually most look about two weeks before that point but something happened you can look into it press releases I'm sure it's easy to find but you can see that there was a ton of trading activity all of the sudden 50 million shares on this day where the average is probably closer to a hundred thousand a day and with that with a gap higher something happened that's monumental widths company and then your job as investors to figure out what that is and if you believe that it's going to be like a wing to the back of this stock and take it to much higher levels it's gonna be sustainable it depends is it a big contract with Disney or something like that then yeah then it's gonna be beneficial for a long term timeframe but you don't know what it is just by looking at the chart and that's why you have to get into the fundamental analysis - which is what I've been preaching on from the beginning in this cars so you put it all together basically then you can imagine there's probably a support level of 160 here and if that holds up that makes it an attractive opportunity in terms of if you want to get involved with a stock like this this is a pinion nut advice and you bought it here at dollar 63 but then you had a stop loss limit where if it fell to a dollar 55 or anything below that you immediately solved you take a small loss but if it does stay above that price it's very likely do you start going off higher and that's gonna be a pretty profitable trade for you this is NSU and it's got pretty good trading volume here looking at about 300,000 shares a day which is good enough that you can rely on technical analysis with a stock like this and that's why when you see a triple bottom like this it approached two dollars this approach to dollars again it's from higher again an approach to dollars again that could potentially be a triple bottom that if this to our support level holds up then the next move for the price of these shares is going to be much higher when you can see that there was a little bit of resistance around the 250 level the shares are having a hard time getting above that they did break through there during the day for two days here but couldn't hold up and they fel l down how far did they fall they fell to the support level so they're probably range bound between $2 and $2 and 50 cents that's the low that's the high for now and eventually the stock either has a breakdown and falls beneath the support level or it has a break out and it breaks above the support above the resistance level and that general is really optimistic for the future direction of the share price now this is real networks are nwk it's breaking my heart because it's a great company and we selected it somewhere around here and I don't know and it's lower than when we picked it not by a ton but it's a good company we think it will turn around but that's on the point this is technical analysis of the chart it's going to try and find short-term opportunities for you more than long-term which is what generally the fundamentals will show you technicals will show you more buying opportunities and prices to get involved with shares Pat so you've heard the expression don't try to catch a falling knife and you would have seen this a lot all the way down from here because people would have seen it here meant like wow it's a lot cheaper than their so it's a good bargain same with their same with theirs in with their averaging down buying more all the way down don't ever try to pick the bottom you wait till the stock proves to you it's reversing and going back the other way as well you can see that at this 390 price point and then closer to $4 a sort of a support here not a ton but also I wanted to show you this topping note pattern because the stock is done very well bottomed out here it trimmed it higher but then it couldn't quite get above this level since it said $4.90 to 5 bucks this is kind of like a resistance level they don't think the stock is worth anywhere in the 5 dollar range 550 525 they're giving up on it at $4.99 and their $4.90 and you can see that had a lot of momentum going on here then it traded sideways for a while from month you couldn't get above that price and at that point by the time you're almost one into the third week of it you must understand that it's obviously not going to break above that level unless something monumental happens and then once it starts not being able to break above that resistance level that's just a dangerous sign for him because then you've got all this downside here and this is exactly what happened and in terms of the trend this trend has been downhill all for and this is a aberration where it sort of bounced a little bit it's not a dead cat bounce but it is a little bit of strength that came back into the stock but then it level though it could not break above that level and it sort of collapsed from there he tried really hard to break through and then it failed like that and so it just sort of collapsed this is a Tec and this one you can you know you look at this chart for men see what you can see and all of this because I'm going to show you something that what you want to do too is you keep an eye on how many shares traded heads so if you say okay from this day this many shares traded this day this day this moistures and you add it up if all of these shares add up to a significant turnover and the shareholder base then that means that you've got a lot more shareholders that are new investors and as such they're hustling to sell the stock and also they just bought because they think it's going all out higher so they're gonna be holding on to their shares that can strange the supply of stocks that are available to be purchased while when there is buying demand such as you see with all those trading activity then it's going to push the stock price higher it kind of crested out at 400 - 25 cents that was sort of I wouldn't say that's a resistance level but that's where it topped it wouldn't get above there but I want to show you something a little bit more when I consider maybe interesting for lack of a better word this is a sort of consolidation pattern that looks like it's setting up here where the stock price comes down trade sideways for a while this is a cup and handle adder so the stock price comes down trade sideways spikes up drops back a bit and then trade sideways this implies that the next move for the stock is some consolidation the way that it played out it shook out all of the investors that want to get rid of the shares and it also has treated it like this because there's a lot of investors who want to get into the shares and then generally after a cup-- on the handle pattern next thing that happens the stock price jumps higher let me show you this in an article that John Wiley & Sons had me write for them okay consolidation patterns and penny stocks you can get this article too through the links would give you but use a little bit of details about how it works with six stages in the consolidation pattern for the cup and handle okay now let's zoom in a bit seeing some bidders okay the six stages of a perfect consolidation pattern see here stage one trade sideways maybe a little bit of support there stage two trades down stage three trade sideways across the bottom of the cup and if it does this for a while this is a point that's most important there's a lot of shareholder turnover through this area during this time then that's going to really set this pattern up to work out really well a lot of shareholder turnover and as I said a lot of the shareholders are now newer investors in this company so they want to hold on for longer they better better and look for stock and then what happens stage four goes up the other side of the cup so down crossing up when it comes up it goes up and then it drops back just a bit and then it trades sideways for stage six of the cup and handle pattern when that happens and you find this pattern and you're accurate with it and there's enough trading volume to support technical analysis which generally with lower price stocks there is not but in this case there was if you find this pattern it can be very profitable to trade because if you buy into the stock you will know it's a consolidation pattern until the stock drops down and starts trading sideways so this is where your my point would be during the handle of the cup and handle pattern and then generally you get benefit of all the upside moves but now I want to show you another chart that's gonna explain something I'm trying to tell you guys you can't trust technical analysis if the trading volume is not significant enough case in point G IgA this is a thinly traded stock trades a bid 20,000 shares and pays something about I don't remember exactly but you can see that this looks like almost a cup and handle consolidation pattern so it's trading sideways drops off trades flat through here pops up higher comes back a bit and trades sideways if you were to buy right here trusting in this chart signal you would have got wiped out it's implying that the next move for the stock price will be much higher from that point right but first of all this was not enough of a shareholder turnover that's why it wasn't very flat it's kind of like a rounding bottom but also just not enough trading volume it could set up a perfect powder and you can't trust it because there's just not enough going on with the stock he treats 20,000 shares in a day it's trading at 35 cents per share then how much is that worth in terms of total value but what seven thousand dollars or something like that for a day that's not enough and that's why this pattern broke down it looked like he was doing one thing and it completely wiped people it and it's just a messy chart there's not enough trading volume to even imply that there'd be a support level here that's why I didn't hold up and it broke down so that's kind of what happened with that even though it looks like what would typically be believed to be a company an old pattern it would have steered you wrong that's why I keep warning you guys about this although even with a thinly traded stock you we'll see things like this where it's a resistance level right across there that's at the 90 cent price point and this dog had a lot of trouble every time it approached that price point and it doesn't matter because even though it's so thinly traded you could still have a lot of resistance or support for a lot of these smaller stocks the reason I want to show you this chart I want to show you something very specifically but what I'm gonna do is I'm gonna zoom in a bit so we can see what we're looking at a little bit better this is a six month chart now and this dog kind of rounded out here and went from downtrend into an uptrend but what I want to show you on this chart is the topping note pattern where it had a strong uptrend one two three months was going higher but then it got to a point where it continually fell back could not quite breakthrough and even when it would approach to 90 it would not get through there but the exception is one day for a little bit on this day it just was where the buying was dying it there's no more buyers so you'll see a stock perform really well until it's just exhausted and that's when it will then lead to this kind of collapse and that's why also if you bought it here you would want to have a stoploss order somewhere around here that if it did start falling going the wrong way you would get out and you would take a small loss at that point rather than ride it all the way down as the majority of investors what I've done but even this one so far today it is only traded 1689 shares so you can't really put a lot of stake or weight into any of this kind of stuff not even things like the RSI or the money flow it's kind of meaningless that there's just ghost town there if not a lot of people trading and it's sometimes a little bit misleading where it looks like wow this is a lot of trading volume because look at how much higher it is than where there's less trading volume but the point is this was low and this wasn't as low but it was still low because we were talking about 250,000 shares on this day and the next day was maybe 50,000 it's it's too little you can't trust anything you're gonna see on this chart and this is envy is what you're getting here I'll show you a couple of things gap higher and another gap higher two days later and a thing about gaps is that they're trying to show you the momentum it's kind of like getting in the argument with your kid or your wife or whatever and they slam the door when they've done the argument you can tell how upset or pissed off they are based on how loud or how hard they slam that door some slams are different than other slams some slams are just trying to say that's Austin I'm gonna say they slam the door and they make a statement and other times they slam the door and you say oh no that you know you're dead but you really made a mistake and they're pissed off right so there's a little bit of subtleties there that's kind of a gapping up and gapping down it's like when a stock gaps higher a little bit like this it's good side sometimes and shares will gap very much higher and that's even more significant that's just one way that I sometimes like to think of it it's sort of adding a statement to the momentum of the stock and this is a breakdown so the stock price is coming down in this downtrend but then here it sort of just collapses a little bit of capitulation almost where everyone's just dumping the shares and a lot of times - it's based on an event such as the earnings report which came up there but you can see it's an up arrow so it's the earnings were better than the period before but they must have been expecting better earnings or when they release their earnings the company made a statement which implied that future operations may be difficult through this other obstacles that they're going to be facing so the share price has collapsed like and I want to show you the matr chart because I want to show you when a stock gets range-bound you can see here you could almost imagine that at this $2 a 40 cent price point there's a little bit of support there it looks like a slice trade-off there and then you could also imagine that there's a bit of resistance and a three dollar price point so you've got two forty on one side the higher end is $3.00 and might be range-bound within that rage for months until something happens which is either collapses or it breaks out of that range and if you're watching to buy it when it comes down to the support level watch very carefully because if it breaks below the support level someone's going on that could be bad but if it holds up there then approaches the resistance level if it could break through that then it's off to the races with that stock what I've got to do - there's a lot of other things I want to show you on these charts especially when we get into the Japanese candlestick charting patterns those are the most important ones this is just a brief overview of some of the more common on chart technical analysis indicators there's all sorts of other stuff too like descending triangles and all that kind of stuff and you can get into that if you want it doesn't really apply a lot of times for a thinly traded stock or a smaller stock like a penny stock but we are going to add a new feature you guys know this is a living course I'm going to add a new feature to the course where we just go through stock by stock by stock the full procedure of looking at the chart and getting into the financials fundamentals and then look at everything even investigating showing you guys how we look into a company we're gonna add that to the course and the coming days so watch for that you're gonna like that a lot and now we'll just keep on rolling let's get into the Japanese candlestick charting patterns these are fun you're gonna love them and they tell you more about the psychology of investors than anything and they're more useful in that sense than anything