Appendix A: Basic Investment Decision Making Based on Chart Analysis
this support zone, more bullishness is expected as it implies that the support is
strong. We also notice bullish divergence in the volume action (3) and MACD (3)
and (4).The stock price is also currently at the lower Bollinger Band, indicating
potential support.
On the other medium term chart seen in Figure A.6, we observe that the stock
is currently finding support at CD. As long as the stock stays above the support,
our bullish view remains intact. In Figure A.2, we notice a five wave formation,
suggesting a potential short‐term move up to meet the downtrend line (2). We can
clearly see the current spinning top, which is a bullish signal. We are also aware of
a developing pattern of cycle lows with the new low expected around the current
time (3). Again this is bullish.fiGURe A.7 Weekly Chart of Dow Jones Industrial Average (Long Term).
Courtesy of Stockcharts.comfiGURe A.8 Daily Chart of Dow Jones (Medium Term).
Courtesy of Stockcharts.com