A price movement through an identified level of support, which is usually followed by heavy volume and sharp declines. Technical traders will short sell the underlying asset when the price of the security breaks below a support level because it is a clear indication that the bears are in control and that additional selling pressure is likely to follow. Technical tools such as moving averages, trendlines and chart patterns are the most common methods for technical traders to identify strong areas of support. The chart above shows that a trader will enter into a short position when the price breaks below an area of support (the thick dark line), which has been identified by using a head and shoulders chart pattern.A breakdown is the bearish counterpart of a breakout.
A term used in technical analysis. A breakaway gap represents a gap in the movement of a stock price supported by levels of high volume. The image shows a gap at the beginning of a large upward movement. If you chart it, the gap reflects a bullish movement when the price has gapped upwards and a bearish movement when the price has gapped downwards.
A technical analysis theory that predicts the strength of the market according to the number of stocks that advance or decline in a particular trading day. The breadth of market indicator is used to gauge the number of stocks advancing and declining for the day. If the breadth indicator is strong, this theory predicts that the market will be rising and vice versa.
A specific type of indicator that uses advancing and declining issues to determine the amount of participation in the movement of the stock market. There are several different types of breadth indicators used by technical analysts.
A mathematical model designed to forecast data within a time series. The Box-Jenkin model alters the time series to make it stationary by using the differences between data points. This allows the model to pick out trends, typically using autoregresssion, moving averages and seasonal differencing in the calculations. Autoregressive Integrated Moving Average (ARIMA) models are a form of Box-Jenkins model. Estimations of the parameters of the Box-Jenkins model is very complicated and is most often achieved through the use of software. The model was created by two mathematicians, George Box and Gwilym Jenkins, and outlined in their 1970 paper, "Time Series Analysis: Forecasting and Control."
In the context of Point & Figure Charts, the box size is the minimum price change that must occur for a given period before a mark (an X or an O) is added to the chart. You can filter out smaller price movements by increasing the box size.
A chart pattern that forms when a small black candlestick is followed by a large white candlestick that completely eclipses or "engulfs" the previous day's candlestick. The shadows or tails of the small candlestick are short, which enables the body of the large candlestick to cover the entire candlestick from the previous day. As implied in its name, this trend suggests that the bulls have taken control of a security’s price movement from the bears. This type of pattern usually accompanies a declining trend in a security, suggesting that a low or end to a security's decline has occurred. However, as usual in candlestick analysis, the trader must take the preceding and following days' prices into account before making any decisions regarding the security.
A trend in candlestick charting that occurs during a downward movement. After a stretch of bearish candlesticks, a bullish or white candlestick forms. The opening price, which becomes the low for the day, is significantly lower then the closing price. This results in a long white candlestick with a short upper shadow and no lower shadow. The bullish belt hold often signals a reverse in investor sentiment from bearish to bullish. Since this trend occurs frequently but is often incorrect in predicting future share prices, it is rarely perceived to be useful. As with any other candlestick charting patterns, more than just two days of trading should be considered when making predictions about trends.