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“This book is an excellent primer. As a proponent of the art-versus-science school of technical analysis, his primary focus is on the practical aspects of chart reading and how to translate the intelligence derived from charts into investment decisions. If you have ever wondered what technical analysis is, or how you could get started doing it, this is a good place to start.”
John Bollinger, CFA, CMT, President, Bollinger Capital Management
“Here is the place to discover why the RSI goes up while the price is going down, how to measure potential moves from a breakout, how not to look at a chart with preconceived notions of what the market will do--‘Let the market talk....’ The advice is above all practical. [This is] a book to own, particularly in the earlier stages of your investment career.”
Michael Smyrk, STA Journal
“Finally, an easy-to-understand explanation of how technical analysis works! This primer shows investors how to spot trends and patterns in the markets that can help them choose winning stocks. Full of practical advice, this is a must have for both individual and professional investors.”
Susie Gharib, Coanchor, PBS Nightly Business Report
The Best-Selling Introduction to Technical Analysis: Updated with New Examples, Techniques, and Guidance!
Technical analysis offers powerful, objective tools for picking stocks and making money--and in today’s market environment, that makes it more indispensable than ever. Unfortunately, most technical analysis books confuse investors instead of enlightening them. In this clear, practical, fully updated book, Barron’s Online technical analysis columnist Michael N. Kahn introduces proven technical analysis techniques in simple language that any investor can understand and use.
Kahn explains how technical analysis works and then teaches you how to read charts and translate them into investment decisions. You’ll learn how to use technical analysis to complement your current approach to stock selection, discover what makes a stock look promising, and objectively assess both risk and reward.
This completely revised third edition contains many new examples reflecting today’s transformed market environment. You’ll find detailed new coverage of recognizing bubbles, including real estate (2006), oil (2008), and bonds (2009). Kahn presents powerful new insights into the relationship between technical analysis and market psychology and crucial, up-to-date guidance on sector rotation in rapidly changing markets. He also presents a full chapter on navigating through chaotic, once-in-a-millennium, “black-swan” market events.
About This Book xxv
How to Get the Most from This Book xxxi
Part I A Few Things You’ll Need to Know Before You Begin
1 Required Background 3
2 What Is Technical Analysis? 13
3 What Is a Chart? 19
4 Jargon You Cannot Avoid 25
Part II The Core of Chart Analysis
5 Concepts 35
6 What Are Supply and Demand in the Markets? 41
7 The Trend Is Your Friend and So Are Trendlines 47
8 See the Forest and the Trees 55
9 Chart Patterns--When the Market Needs a Rest 63
10 Chart Patterns--When the Market Is Changing Its Mind 73
11 Chart Patterns--Explosions 83
12 Corrections in Perspective 89
Part III Technical Analysis in the Real World
13 What Is There Other Than Price? 97
14 Volume 109
15 Time 117
16 Sentiment 121
17 Fundamental Analysis Really Is Technical Analysis 131
18 Just What Makes a Stock (Bond, Commodity) Look Good? 137
19 Risk Versus Reward--Is This Stock Really Worth It? 149
20 This Isn’t Brain Surgery 161
Part IV The Actual Process of Investing
21 OK, Now Do It! 177
22 How to Know if You Are Wrong 183
23 Sometimes Being Wrong Is Good 187
24 When to Sell 191
25 Bear Markets 203
26 A Word About Your Ego 209
Part V Tools and Case Studies
27 What Do I Really Need to Get Started? 213
28 Building Your Technical Toolbox 219
29 Final Advice 225
30 Case Study--The Perfect World 227
31 Case Study--The Real World 235
32 Case Study--Bizarro World 249
33 How Good Is Your Broker’s Stock? 253
Part VI Further on Down the Road
34 Introduction to Candlesticks 261
35 Cycles 271
36 Elliott Waves 275
37 Technical Terms You May Have Heard 279
38 Debunking the TV Analyst 299
Fun with Jargon 303
Closing Thoughts 311