Stock Market Trend Analysis Made Easy.
There’s an old saying in the stock market that the “trend is your friend”.
This means simply that, as long as you’re in sync with the stock market trend overall, and especially with individual stock trends, you should be making money in the market.
A nicely trending stock will conform to Newton’s First Law of Motion – that says once an object is in motion, it will tend to stay in the same speed and direction of that motion unless acted upon by an unbalanced force.
What is the “unbalanced force” that will cause a stock to change its trend? Well, it could come in the form of several different things – an unexpected good (or bad) earnings report, a new product announcement, another company buying it out, etc. Or it could simply be overextended or underextended above or below historical price action. But the truth of the matter is, you don’t have to know exactly what the underlying cause of the “unbalanced force” is. You have other tools at your disposal to clue you in when a stock is about to change its trend.
One of the simplest tools to use in stock trend analysis is just the use of trend lines. Simply drawing a line underneath the trending price action of a stock will tell you when the trend is violated. I do that often in our Stock Fishing Videos within our daily stock chart analysis lessons.
Candlestick analysis is a crucial tool in alerting you when the trend of a stock’s price action is about to drastically change. Any of the most common reversal signals will give you a heads-up in that area.
Finally, stochastics do a great job in giving you advance warning of a pending stock trend change. Knowing how to glance at stochastics will give you instant knowledge of the probability of a trend change.
We use just a handful of tools – including those above – to beat the market year after year. Once you learn our simple, visual system of stock chart analysis, you’ll be able to immediately tell when a stock trend change is about to happen.