Glossary · 73 terms
Technical Analysis
All technical analysis terms in the EquitiesAmerica.com glossary — plain-English definitions for American investors.
Accumulation Phase
The Accumulation Phase is the stage in market cycle analysis, particularly in the Wyckoff framework, where informed and institutional participants historically absorbed supply from discouraged sellers following a significant price decline.
Accumulation/Distribution Line(A/D Line)
The Accumulation/Distribution Line (A/D Line) is a volume-based technical indicator developed by Marc Chaikin that attempts to assess whether a security is being accumulated (bought) or distributed (sold) by relating the closing price's position within the day's high-low range to the period's volume. It is one of the foundational volume-price indicators in the technical analysis literature.
Arms Index (TRIN)(TRIN)
The Arms Index, also known as the TRIN (Short-Term Trading Index), is a market breadth indicator developed by Richard Arms in 1967 that combines advance-decline data with advance-decline volume to measure whether volume is flowing disproportionately into advancing or declining stocks, used historically to assess the intensity of buying and selling pressure in the broader market.
Ascending / Descending Triangle(ascending triangle)
An ascending triangle is a chart pattern characterized by a horizontal resistance line at a series of similar highs and a rising trendline connecting progressively higher lows, historically interpreted as a potential bullish continuation pattern; a descending triangle is the inverse, with a horizontal support line and declining highs, historically associated with bearish continuation.
Average True Range(ATR)
Average True Range (ATR) is a volatility indicator developed by J. Welles Wilder Jr. that measures the average magnitude of a security's historical price movements over a specified period, incorporating gaps between sessions to capture the full range of price activity.
Bollinger Bands(BB)
Bollinger Bands are a volatility indicator consisting of a simple moving average flanked by two bands plotted at a specified number of standard deviations above and below the average, designed to characterize the historical relationship between price and price variability.
Breadth Thrust(Zweig Breadth Thrust)
A Breadth Thrust is a technical market breadth signal that historically occurred when the ratio of advancing NYSE issues to total advancing plus declining issues surged from an oversold level to a strongly overbought level within a short period, a pattern historically associated with the early stages of powerful new bull markets in U.S. equities.
Breakout(price breakout)
A breakout is the movement of a security's price above a defined resistance level or below a defined support level, often accompanied by increased volume, and is historically interpreted in technical analysis as a potential signal that the prior price range has been overcome and that directional momentum may continue.
Candlestick Chart(Japanese candlestick)
A candlestick chart is a type of financial chart that displays the open, high, low, and closing price of a security for a specified time period using a 'candle' shape, with the body representing the open-to-close range and the wicks extending to the period high and low.
Chaikin Money Flow(CMF)
Chaikin Money Flow (CMF) is a volume-weighted average of the Accumulation/Distribution values over a specified lookback period, developed by Marc Chaikin, that produces a bounded oscillator reflecting the degree to which volume has historically been concentrated on days when the close was near the high versus near the low of the day's range.
Commitment of Traders Report(COT Report)
The Commitment of Traders Report is a weekly publication by the U.S. Commodity Futures Trading Commission that discloses the aggregate long and short futures positions held by large commercial and non-commercial participants.
Cup and Handle Pattern(cup with handle)
The cup and handle is a chart pattern described in technical analysis literature in which a price chart forms a rounded bowl shape (the cup) followed by a smaller, downward-sloping consolidation channel (the handle), with the sequence historically associated with a subsequent upward breakout above the pattern's prior resistance level.
Dark Cloud Cover
Dark Cloud Cover is a two-session bearish reversal candlestick pattern in which a bullish session is followed by a bearish session that opens above the prior high and closes below the midpoint of the prior bullish candle.
Death Cross(50-200 day moving average bearish crossover)
A Death Cross is a technical analysis chart pattern that occurs when a shorter-term moving average — most commonly the 50-day simple moving average — crosses below a longer-term moving average, most commonly the 200-day simple moving average, historically associated with periods of sustained price weakness in U.S. equities.
Distribution Phase
The Distribution Phase is the stage in Wyckoff market cycle analysis where large participants historically transferred supply to less informed buyers near the peak of a price advance, preceding a sustained decline.
Doji Candlestick
A Doji is a candlestick in which the opening and closing prices are equal or nearly equal, producing a cross or plus-sign shape that historically indicated equilibrium between buyers and sellers within a single session.
Donchian Channels(Donchian Channel)
Donchian Channels are a technical indicator developed by commodities trader Richard Donchian in the 1950s, consisting of three lines: an upper band at the highest high, a lower band at the lowest low, and a midline at their average, all calculated over a specified lookback period. They are a foundational tool in trend-following systems and played a significant role in the history of systematic trading.
Double Top / Double Bottom(double top)
A double top is a chart pattern in which a security reaches approximately the same price high on two separate occasions with a moderate pullback in between, historically associated with a potential reversal of an uptrend; a double bottom is the inverse pattern, with two similar lows potentially signaling a reversal of a downtrend.
Elliott Wave Theory(Elliott Wave)
Elliott Wave Theory is a form of technical analysis developed by Ralph Nelson Elliott in the 1930s that describes recurring fractal patterns of five-wave impulse sequences and three-wave corrective sequences in historical price data, based on the idea that market prices reflect collective investor psychology that moves in identifiable patterns.
Engulfing Pattern
An Engulfing Pattern is a two-session candlestick formation in which the second candle's body completely contains the first candle's body, with a bullish engulfing appearing at lows and a bearish engulfing appearing at highs.
Equity Put-Call Ratio(put-call ratio)
The Equity Put-Call Ratio is a sentiment indicator derived from options market data that measures the volume of equity put options traded relative to equity call options on a given day, historically used as a contrarian gauge of investor fear and complacency in U.S. stock markets.
Evening Star Pattern
The Evening Star is a three-candle candlestick pattern observed historically at price highs, consisting of a large bullish candle, a small-bodied middle candle, and a large bearish candle that closes well into the first session's body.
Exponential Moving Average(EMA)
An exponential moving average (EMA) is a type of moving average that assigns greater weight to more recent prices in its calculation, causing it to respond more quickly to recent price changes than a simple moving average (SMA) of the same period. EMAs are among the most widely referenced tools in the technical analysis literature applied to U.S. equity markets.
False Breakout(failed breakout)
A false breakout occurs when a security's price temporarily moves above a resistance level or below a support level, creating the appearance of a breakout, but then reverses back through the level without sustaining directional momentum, trapping traders who entered positions based on the initial breakout signal.
Fibonacci Retracement(Fibonacci levels)
Fibonacci retracement is a technical analysis tool that plots horizontal price levels at specific percentage ratios derived from the Fibonacci number sequence — most commonly 23.6%, 38.2%, 50%, 61.8%, and 78.6% — to identify historically significant price zones within a prior price swing.
Flag and Pennant(bull flag)
A flag is a short-term continuation chart pattern consisting of a sharp directional price move (the flagpole) followed by a brief, relatively tight rectangular consolidation channel that slopes counter to the prior trend; a pennant is similar but features converging trendlines during the consolidation, forming a small symmetrical triangle atop the flagpole.
Gap (Price Gap)(gap)
A price gap is a discontinuity on a bar or candlestick chart in which the opening price of a trading session is materially higher or lower than the prior session's closing price, leaving a visible empty space on the chart where no trading occurred.
Golden Cross(50-200 day moving average bullish crossover)
A Golden Cross is a bullish technical analysis chart pattern that occurs when a shorter-term moving average — typically the 50-day simple moving average — crosses above a longer-term moving average, typically the 200-day simple moving average, historically associated with improving price momentum and the potential resumption of an uptrend in U.S. equities.
Hammer Candlestick
A Hammer is a single-session bullish reversal candlestick with a small body near the top of the range and a long lower wick at least twice the body length, observed historically at the lows of downtrends.
Harami Pattern
A Harami is a two-session candlestick pattern in which a large first candle is followed by a smaller second candle whose body is completely contained within the first candle's body, historically observed at potential reversal points.
Head and Shoulders Pattern(H&S pattern)
The head and shoulders is a historical chart pattern studied in technical analysis, characterized by three consecutive peaks — a taller central peak ('head') flanked by two shorter peaks ('shoulders') — that has historically been associated with trend reversals at market tops in examined historical price data.
Heikin-Ashi(Heiken-Ashi)
Heikin-Ashi is a Japanese candlestick variant that calculates each candle using averaged price data from the current and prior period, producing a smoother visual representation of price trends.
High-Low Index(new high-new low index)
The High-Low Index is a market breadth indicator that measures the ratio of stocks hitting 52-week highs relative to the sum of stocks hitting 52-week highs plus 52-week lows, historically used to assess the internal strength or weakness of a broad market trend by examining new-high and new-low leadership dynamics.
Hindenburg Omen(Hindenburg signal)
The Hindenburg Omen is a technical market breadth indicator that historically identified conditions observed before several major U.S. stock market crashes, triggered when the simultaneous number of 52-week highs and 52-week lows on the NYSE both exceed a defined threshold on the same day.
Ichimoku Cloud(Ichimoku Kinko Hyo)
The Ichimoku Cloud (Ichimoku Kinko Hyo) is a comprehensive technical analysis framework developed by Japanese journalist Goichi Hosoda in the 1930s and published in 1969, which uses five components derived from historical high, low, and closing prices to represent price momentum, support and resistance levels, and the overall historical price structure on a single chart.
January Barometer(January effect barometer)
The January Barometer is a stock market seasonal observation, popularized by Yale Hirsch in 1972, which notes that the direction of the S&P 500 in January has historically corresponded with its direction for the full calendar year, giving rise to the phrase 'as January goes, so goes the year.'
Keltner Channels(Keltner Channel)
Keltner Channels are a volatility-based technical indicator consisting of three lines: a central exponential moving average and two outer bands set at a multiple of the Average True Range (ATR) above and below the center line. Originally developed by Chester Keltner in the 1960s and later modified by Linda Bradford Raschke, they are used in technical analysis to represent historical price volatility envelopes.
MACD(Moving Average Convergence Divergence)
MACD (Moving Average Convergence Divergence) is a trend-following momentum indicator that displays the relationship between two exponential moving averages of a security's price, commonly used to identify historical shifts in the pace and direction of price momentum.
Markdown Phase
The Markdown Phase is the stage in market cycle analysis following distribution where price historically declined persistently as supply overwhelmed demand at successively lower levels.
Market Auction Theory
Market Auction Theory is a framework for analyzing price discovery that treats every market as a continuous two-sided auction in which buyers and sellers negotiate to find prices that facilitate trade.
Market Profile(volume profile)
Market profile is a charting methodology developed by J. Peter Steidlmayer at the Chicago Board of Trade that organizes traded price and volume data into a statistical distribution — displayed as a rotated histogram — to reveal where the majority of trading activity occurred during a defined period, identifying the market's value area and point of control.
Markup Phase
The Markup Phase is the stage in market cycle analysis between accumulation and distribution where price historically rose persistently as demand absorbed available supply at successively higher levels.
Marubozu
A Marubozu is a candlestick with a long body and no wicks — or minimal wicks — indicating that price moved in one direction from open to close with no meaningful rejection at either end of the session range.
McClellan Oscillator(McClellan breadth oscillator)
The McClellan Oscillator is a market breadth momentum indicator calculated as the difference between the 19-day and 39-day exponential moving averages of the NYSE net advancing issues (advancing minus declining stocks), used historically to assess the short-to-intermediate-term momentum of broad market participation.
McClellan Summation Index(Summation Index)
The McClellan Summation Index is a long-term market breadth indicator calculated as the running cumulative total of the daily McClellan Oscillator values, providing a broader view of the overall trend in NYSE market breadth and historically used to identify major bull and bear market cycles.
Morning Star Pattern
The Morning Star is a three-candle candlestick pattern observed historically at price lows, consisting of a large bearish candle, a small-bodied middle candle, and a large bullish candle that closes well into the first session's body.
Moving Average(simple moving average)
A moving average is a technical indicator that calculates the average closing price of a security over a specified number of past periods, updated continuously to smooth out short-term price fluctuations and reveal longer-term price trends.
On-Balance Volume(OBV)
On-Balance Volume (OBV) is a cumulative volume indicator developed by Joe Granville that adds each day's volume to a running total on up days and subtracts it on down days, used historically to study whether volume flow has been consistent with or diverging from the direction of price movement.
Open Interest Analysis(OI Analysis)
Open Interest Analysis examines the total number of outstanding futures or options contracts that have not been settled, using changes in open interest alongside price to assess the conviction behind a move.
Order Flow Analysis(tape reading)
Order flow analysis is a market microstructure approach to evaluating price and volume data that focuses on the real-time balance between buyer-initiated and seller-initiated transactions at each price level to assess the strength or weakness of directional price moves and the likelihood of continuation or reversal.
Parabolic SAR(Parabolic Stop and Reverse)
The Parabolic SAR (Stop and Reverse) is a technical indicator developed by J. Welles Wilder Jr. and published in his 1978 book that plots dots above or below price bars to indicate historical trend direction, using an acceleration factor that causes the indicator to move closer to price over time as a trend persists.
Percentage of Stocks Above 200-Day MA(percent above 200-day moving average)
The Percentage of Stocks Above the 200-Day Moving Average is a market breadth indicator that measures what proportion of stocks within an index or exchange are trading above their individual 200-day simple moving averages, historically used to assess the long-term trend health of the broad U.S. stock market.
Piercing Line
The Piercing Line is a two-session bullish reversal candlestick pattern in which a bearish session is followed by a bullish session that opens below the prior low and closes above the midpoint of the prior bearish candle.
Pivot Point(daily pivot)
A pivot point is a calculated price level derived from the prior session's high, low, and closing prices, widely used in technical analysis as a reference point for intraday support and resistance levels, with the central pivot and its surrounding levels historically serving as potential areas of price reaction in U.S. equity and futures markets.
Point and Figure Chart(P&F chart)
A point and figure (P&F) chart is a method of charting price movements that uses columns of X symbols (rising prices) and O symbols (declining prices) to record only significant price changes that meet a defined box size, filtering out minor fluctuations and ignoring time entirely. It is one of the oldest methods of charting price history used in U.S. financial markets.
Relative Strength Index(RSI)
The Relative Strength Index (RSI) is a momentum oscillator developed by J. Welles Wilder Jr. that measures the speed and magnitude of recent price changes to characterize the relative pace of gains versus losses over a specified look-back period, typically 14 periods.
Renko Chart
A Renko chart is a price-only charting method that constructs uniform-sized bricks whenever the asset moves a set amount, filtering out time and minor fluctuations entirely.
Resistance Level
In technical analysis, a resistance level is a historical price area where selling pressure has previously been strong enough to halt or reverse an advancing price trend, characterized by recurring instances of the price stalling or reversing in that zone.
Shooting Star
A Shooting Star is a single-session bearish reversal candlestick with a small body near the bottom of the range and a long upper wick at least twice the body length, observed historically at the highs of uptrends.
Spinning Top
A Spinning Top is a candlestick with a small body relative to its total range, featuring upper and lower wicks of roughly equal length, historically indicating indecision and balance between buyers and sellers within a session.
Stochastic Oscillator(stochastics)
The stochastic oscillator is a momentum indicator developed by George Lane in the 1950s that compares a security's closing price to its price range over a specified lookback period, producing a value between 0 and 100. It is one of the most widely cited momentum oscillators in the technical analysis literature applied to U.S. equity markets.
Super Bowl Indicator(Super Bowl stock market theory)
The Super Bowl Indicator is a light-hearted market folklore observation suggesting that when a team from the old NFL (now NFC or original AFC) wins the Super Bowl, the U.S. stock market tends to post gains for that year, while a win by an original AFL team has historically been followed by market declines.
Support Level
In technical analysis, a support level is a historical price area where buying interest has previously been strong enough to halt or reverse a declining price trend, characterized by recurring instances of the price stabilizing or bouncing in that zone.
Three Black Crows
Three Black Crows is a candlestick pattern consisting of three consecutive bearish candles with successively lower closes and minimal lower wicks, historically observed following an uptrend or at price highs.
Three White Soldiers
Three White Soldiers is a candlestick pattern consisting of three consecutive bullish candles with successively higher closes and minimal upper wicks, observed historically following a downtrend or consolidation.
Tick Index($TICK)
The tick index is a real-time market breadth indicator that measures the difference between the number of NYSE-listed stocks whose last trade was an uptick (price higher than the prior trade) and those whose last trade was a downtick (price lower than the prior trade), providing a snapshot of the prevailing directional bias across the broad market at any given moment.
Volume Profile(VP)
Volume Profile is a charting tool that displays trading volume distributed across price levels over a selected period, revealing the price zones where the greatest and least market activity historically occurred.
Volume Weighted Average Price(VWAP)
Volume Weighted Average Price (VWAP) is the average price at which a security has traded throughout a trading day, weighted by the volume of each transaction, giving greater influence to price levels where larger quantities of shares have historically changed hands.
Williams %R(Williams Percent R)
Williams %R is a momentum oscillator developed by Larry Williams that measures the relationship between a security's closing price and the highest high over a specified lookback period, expressed on an inverted scale from 0 to -100. It is closely related in construction to the stochastic oscillator and is a standard tool in the technical analysis literature.
Wyckoff Method(Wyckoff analysis)
The Wyckoff Method is a framework for analyzing historical price and volume action in financial markets, developed by Richard D. Wyckoff in the early 20th century, that describes phases of accumulation and distribution by large market operators and is used to interpret the historical relationship between price, volume, and market structure.
Wyckoff Spring
A Wyckoff Spring is a brief, low-volume price penetration below the support boundary of an accumulation range that historically served as a final test of supply before a sustained advance.
Wyckoff Upthrust
A Wyckoff Upthrust is a brief, volume-accompanied penetration above the resistance boundary of a distribution range that historically resolved quickly downward, signaling supply absorbing demand at elevated prices.
Zweig Breadth Thrust(Zweig breadth signal)
The Zweig Breadth Thrust is a rare technical breadth indicator developed by Martin Zweig that historically signaled the start of powerful new bull markets when the 10-day moving average of advancing NYSE issues as a percentage of all advancing plus declining issues surged from below 40% to above 61.5% within any 10-trading-day window.