On-Balance Volume, Accumulation/Distribution, Chaikin Money Flow, Pivot Point, Resistance and Support, and Point & Figure Chart, with Apple and Google Exhibits

Even great stocks such as Apple and Google have their bad times, when the price sells off and it is time to sell and wait for another day. In this chapter we are going to discuss the signals that first identify the transition from demand that is taking price up, to supply that is taking price down. On-balance volume, accumulation/distribution, and Chaikin Money Flow are the easiest signals to learn. It is very easy to see the direct relationship of supply and demand to these signals. They will show demand dropping and supply taking over, thus taking price down. This will happen before the slow-moving 50- and 200-day signals start dropping. They will give you the early warning that change is on the horizon. Leading indicators are the most sought after signals in the technician's tool kit. Reliable ones are very difficult to find. If you discover one, you can make millions on Wall Street.


The first thing you want to do when you look at any chart is to look at price and volume to see demand (i.e., increasing volume with price going up) and supply (i.e., increasing volume with price going down). It could be just strong price moves up or down without volume confirming. Once you understand this simple, visual picture of supply and demand shown on the chart, you will know what to look for in any technical ...

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