Breakout

 

A price movement through an identified level of support or resistance, which is usually followed by heavy volume and increased volatility. Traders will buy the underlying asset when the price breaks above a level of resistance and sell when it breaks below support

 In practice, a breakout is most commonly used to refer to a situation where the price breaks above a level of resistance and heads higher, rather than breaking below a level of support and heading lower. Once a resistance level is broken, it is regarded as the next level of support when the asset experiences a pullback  Most traders use chart patterns and other technical tools such as trendlines to identify possible candidates that are likely to break through a support/resistance level. 

 

A breakout is the bullish counterpart to a breakdown. 

 

 

 

The rate of Change

THE USE OF ROC

The Rate of Change (ROC) indicator is a very simple yet effective momentum oscillator that measures the percent change in price from one period to the next. The ROC calculation compares the current price with the price n periods ago.

 ROC should be used in conjunction with other aspects or technical analysis as well as other non-momentum based indicators. 

Many traders use a value greater than zero to indicate an increase in upward momentum.

ROC adalah indicator untuk momentum ke atas dan momentum ke bawah terhadap harga saham:

1.    Jika garis ROC bergerak keatas menembus garis 0 (nol) berarti ada momentum harga naik keatas. Kekuatannya tergantung seberapa tinggi garis tsb dari jarak nol. Semakin tinggi semakin menunjukkan momentum yang lehih kuat.

2.    Demikian juga sebaliknya .

 

 

Technical Analysis

DISPARITY INDEX

 

A technical indicator that measures the relative position of the most recent closing price to a selected moving average and reports the value as a percentage. A value greater than zero suggests that the asset is gaining upward momentum, while a value less than zero can be interpreted as a sign that selling pressure is increasing. 

 

 Extreme values of this indicator can be a very useful tool for contrarian investors to foretell periods of exhaustion. Once the price is excessively pushed in one direction, there are very few investors to take the other side of the transaction when the participants wish to close their position, ultimately leading to a price reversal. Similar to the ROC indicator, important signals are generated when the indicator crosses over the zero line because it is an early signal that momentum is building. 

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