Technical analysis is a hot topic for investors right now and offers powerful, objective tools for picking stocks and making money--but most explanations of the subject simply confuse investors instead of enlightening them. In this clear, practical book, Barron's columnist Michael Kahn introduces technical analysis in simple English. Kahn explains exactly how technical analysis works, then teaches you how to read charts and translate what they tell you into real buy and sell decisions. The fully updated Second Edition contains many new examples reflecting major market changes since the First Edition: 9/11, equities bear markets, commodities bull markets, changing interest rates, and more. Step by step, Kahn illuminates the basic theory of technical analysis, demystifies its jargon, outlines its core techniques, and shows how to use it to complement (not replace) the reader's current approach to stock selection. He explains trendlines, chart patterns, and corrections; reveals what makes a stock look promising; and helps to assess potential risk and reward.
Table of Contents
Acknowledgments xix About the Author xxi Preface xxiii About This Book xxvii How to Get the Most From This Book xxxiii Part I: A Few Things You'll Need to Know Before You Begin 1 Chapter 1: Required Background 3 Chapter 2: What Is Technical Analysis? 13 Chapter 3: What Is a Chart? 19 Chapter 4: Jargon You Cannot Avoid 25 Part II: The Core of Chart Analysis 33 Chapter 5: Concepts 35 Chapter 6: What Are Supply and Demand in the Markets? 41 Chapter 7: The Trend Is Your Friend and So Are Trendlines 47 Chapter 8: See the Forest and the Trees 55 Chapter 9: Chart Patterns--When the Market Needs a Rest 63 Chapter 10: Chart Patterns--When the Market Is Changing Its Mind 73 Chapter 11: Chart Patterns--Explosions 83 Chapter 12: Corrections in Perspective 89 Part III: Technical Analysis in the Real World 95 Chapter 13: What Is There Other Than Price? 97 Chapter 14: Volume 109 Chapter 15: Time 117 Chapter 16: Sentiment 121 Chapter 17: Fundamental Analysis Really Is Technical Analysis 129 Chapter 18: Just What Makes a Stock (Bond, Commodity) Look Good? 135 Chapter 19: Risk Versus Reward--Is This Stock Really Worth It? 147 Chapter 20: This Isn't Brain Surgery 159 Part IV: The Actual Process of Investing 173 Chapter 21: OK, Now Do It! 175 Chapter 22: How to Know if You Are Wrong 181 Chapter 23: Sometimes Being Wrong Is Good 185 Chapter 24: When to Sell 189 Chapter 25: Bear Markets 201 Chapter 26: A Word About Your Ego 205 Part V: Tools and Case Studies 207 Chapter 27: What Do I Really Need to Get Started? 209 Chapter 28: Building Your Technical Toolbox 215 Chapter 29: Final Advice 221 Chapter 30: Case Study--The Perfect World 223 Chapter 31: Case Study--The Real World 231 Chapter 32: How Good Is Your Broker's Stock? 245 Part VI: Further On Down the Road 251 Chapter 33: Introduction to Candlesticks 253 Chapter 34: Cycles 263 Chapter 35 Elliott Waves 267 Chapter 36: Technical Terms You May Have Heard 271 Chapter 37: Debunking the TV Analyst 289 Fun with Jargon 293 Closing Thoughts 301 Index 303
Michael N. Kahn has been charting the markets for more than two decades as a product designer, analyst, and teacher. He writes extensively for wide investment audiences, both in his proprietary newsletter Quick Takes Pro and in columns for Barron's Online and was formerly the chief technical analyst for BridgeNews, a division of Bridge Information Systems, a leading source of global financial information, transaction and network services. Kahn is a widely sought-after guest on financial television networks for both his accuracy and his ability to clearly explain markets. He is a board member of the Market Technicians Association, and author of Technical Analysis Plain and Simple, First Edition (FT Prentice Hall) and Real World Technical Analysis (CRB Publishing).