Technical analysis ala fundamental analyst

transcript

Technical Analysisala Fundamental Analyst

MM Dandytra, CSA, CFTe

Technical Analysis (CFTe Version)John J. Murphy• “Technical Analysis of the Financial Markets”• The study of market action through the use of chats for the

purpose of forecasting future price trends

Martin J. Pring• “Technical Analysis Explained”• The art to identify a trend reversal at a relatively early stage

and ride on that trend until the weight of the evidence shows or proves that the trend has reversed

John D. Magee and Roberts D. Edwards• “Technical Analysis of Stocks Trends”• The science of recording in graphic form the actual history

of trading and then deducing from that pictured history the probable future trend

The Use of Technical Analysis

Technical Analysis

Trend Analysis

Timing Analysis

Price Analysis

Investment Strategy

Decision & Action

Technical Analysis Branches

Technical Analysis

Classic Modern (Indicators)

Technical Analysis

Basic Theory

Dow Jones Theory

Trend Analysis

Supply Demand

Line Analysis

Support Resistance

Trendline

Channel

Price Pattern Analysis

Candlestick

Bar Chart

Gap Analysis

Chart Pattern Analysis

Reversal Pattern

Continuation Pattern

Hybrid Pattern

Volume Analysis

Spesific Theory

Elliot Wave

Gann Method

Fibonacci Method

Indicators

Momentum

Stochastic Oscillator

Trend Following

Moving Average

Volume

On Balance Volume

Volatility

Bollinger Band

Average Trading Range

Sentiment

Market Breadth

Advance Decline

Quantitative Methods

Standard Deviation

Linear Regression

Technical Analysis’ Premises Price Discounts Everything Price Moves in Trend History Repeats Itself

Detail Definition of Technical Analysis

Technical AnalysisJohn J. Murphy• “Technical Analysis of the Financial Markets”• The study of market action through the use of charts for the

purpose of forecasting future price trends

Martin J. Pring• “Technical Analysis Explained”• The art to identify a trend reversal at a relatively early stage

and ride on that trend until the weight of the evidence shows or proves that the trend has reversed

John D. Magee and Roberts D. Edwards• “Technical Analysis of Stocks Trends”• The science of recording in graphic form the actual history

of trading and then deducing from that pictured history the probable future trend

Objects Actual History of Market Action Recording in Graphic Form or Charts

Market Action are Price Volume Open Interest (in Futures Market)

Objectives Deducing From That The Probable Future Trend Forecasting Future Price Trends or A Trend Reversal

Time Relatively Early Stage Until Weight of the Evidence The Trend Has

Reversed

The Point Is ...

Everything that “use” Historical Data to predict Future Movement is a Technical AnalysisFULL STOP !

Market Analyst

Fundamental Analysis

Economic Analysis

Technical Analysis

Bandarmologi (Tape

Reading)

STRATEGIST

Experience

History Repeat Itself & Price Moves in Trend

Cycle and Seasonality

• Kondratieff• Presidential• 40 Months

Coal Newcastle

Seasonality

• Ramadhan• January Effect• Windows

Dressing• Sell in May

and Go Away

January Effect in JCI

January Effect terjadi 15 kali sejak tahun 1991 (23tahun) sehingga peluang terjadinya adalah 65.2%

Windows Dressing in JCI

Sejak tahun 1990, IHSG pada akhir bulan Desember selalu naikdibanding akhir bulan November kecuali pada tahun 1992, 1994 dan2000

MoM Inflation

Inflasi MoM cenderung turun dari 1Q hingga 2Q lalu kemudian naik lagi hingga awal 3Q kemudian menjelang 4Q namun kembali naik di akhir 4Q

CPIN Near Ramadhan

CPIN naik minimal 24% hingga 93% dua bulan menjelang Lebaran antara 2009 hingga 2012

Siklus 40 Bulan Batubara Newcaslte

Kondratieff Cycle and Presidential Cycle

(Fundamental) Trend Analysis

Uptrend and Downtrend

HH : Higher HighHL : Higher Low

LH : Lower HighLL : Lower Low

UPTREND

DOWNTREND

Standard Definition in “Opposite”

Technical Rebound A temporary and

relatively small rise during Downtrend

Technical Correction A temporary and

relatively small fall during Uptrend

Technical Rebound

Technical Correction

Trend Analysis

• Uptrend• Downtrend

Strengthening Trend

• Accelerating Uptrend

• Accelerating Downtrend

Against Trend

• Deccelerating Uptrend

• Deccelerating Downtrend

• Technical Rebound

• Technical Correction

Trend Reversal

• Bullish Reversal

• Bearish Reversal

Rising YoY ; Rising QoQ

Rising YoY ; Falling QoQ

Falling YoY ; Rising QoQ

Falling YoY ; Falling QoQ

Financial Statement – Trend Analysis Trend Uptrend

YoY Rise and QoQ Rise Downtrend

YoY Fall and QoQ Fall

Strengthening Trend Accelerating Uptrend

QoQ Rise > YoY Rise Accelerating Downtrend

QoQ Fall > YoY Fall

Against Trend Deccelerating Uptrend

QoQ Rise < YoY Rise Deccelerating Downtrend

QoQ Fall < YoY Fall Technical Correction

YoY Rise but QoQ Fall Technical Rebound

YoY Fall but QoQ Rise

Chart Pattern Types

Reversal Pattern

Bullish

Double / Triple Bottoms

Inverted Head and Shoulders

Bearish

Double / Triple Tops

Head and Shoulders

Continuation Pattern

Bullish

Ascending Triangle

Falling Wedges

Bullish Flag

Cup and Handle

Bearish

Descending Triangle

Rising Wedges

Bearish Flag

Hybrid Pattern

Symmetrical Triangle Rectangle Rounding Top Rounding

Bottom

Double / Triple Tops

The Pattern Previous Condition & Expected Movement

Previous Condition : Uptrend

Expected Movement Downtrend

Target Price

The Height between two or three Tops to Baseline, projected Downward

Example

Head and Shoulders

The Pattern Previous Condition & Expected Movement

Previous Condition : Uptrend

Expected Movement Downtrend

Target Price

Height between Head and Neckline, projected Downward

Example

Inflasi YoY – Inverted Head and Shoulders

Logic Technical Analysis’ Indicators

Technical Analysis’ Indicators

Indicators

Momentum

Stochastic Oscillator

Trend Following

Moving Average

Volume

On Balance Volume

Volatility

Bollinger Band

Average Trading Range

Sentiment

Market Breadth

Advance Decline

Quantitative Methods

Standard Deviation

Linear Regression

Logic Indicators (So Far ...) Moving Average Bollinger Band Rate of Change

The Basic of Moving Average Averaging certain periods Price above MA = Bullish Price below MA = Bearish Short MA above Long MA = Bullish Short MA below Long MA = Bearish

Fundamental Moving Average MA20 ~ 1 Month ~ MoM MA60 ~ 3 Months ~

Quarterly or QoQ MA200 ~ 1 Year ~

Yearly or YoY

MA20 is a Monthly Average Price

MA60 is a Quarterly Average Price

MA200 is a Yearly Average Price

MA20 above MA60 = Monthly Average Price is

above Quarterly Average Price

MoM Rise > QoQ Rise MoM Price > QoQ Price

MA60 above MA200 = Quarterly Average Price

is above Yearly Average Price

QoQ Rise > YoY Rise QoQ Price > YoY Price

The Basic of Bollinger Band Bollinger Band = MA20 and +/- 2x Standard

Deviation of MA20 Middle Band (MA20) Upper Band (+2x Standard Deviation of MA20) Lower Band (-2x Standard Deviation of MA20)

+/- 2x Standard Deviation = ~95% Datas are Within The Band

Fundamental Bollinger Band

Squeeze

The Basic of Rate of Change Rate of Change (RoC) is a percentage of change for

certain period RoC 14 = 20% means there is a 20% rise from 14

days ago to current price

RoC 20 = MoM Change RoC 60 = QoQ Change RoC 200 = YoY Change

Fundamental Rate of Change

Liquidity

Supply Demand Theory

When Demand > Supply = Price Rise When Demand < Supply = Price Fall

Capital Market

Demand Supply

Buyers or Bull-ishers Increase in Funds or

Investor Monetary Expantion

Sellers or Bear-ishers Initial Public Offering Rights Issue

Basic Volume AnalysisPrice Volume Indication Explanation

Rise Rise Bullish Volume Confirms TrendRise Fall Bearish Volume Against TrendFall Rise Bearish Volume Confirms TrendFall Fall Bullish Volume Against Trend

Compare today’s price and previous (mostly yesterday) prices to determine the Rise or Fall of Price and Volume

U.S Quantitative Easing 1st, 2nd and the 3rd

Why Market Capitalization Matter ? Easy Come – Easy Go Less Trail Better Good Corporate

Governance Industry Leader Better Future Prospect Going (less) Concern

Current Biggest Market Cap in JCI : HMSP Rp363.8tr ASII Rp269.2tr BBCA Rp236.8tr UNVR Rp221.3tr TLKM Rp218.7tr BBRI Rp188tr PGAS Rp139.4tr SMGR Rp94.6tr GGRM Rp94.5tr

Intermarket Analysis

Economic Cycle

Intermarket Analysis

Stocks Market

Bonds Market

Money Market

Commodities Market

JCI vs Gov. Bond 10Yr

JCI vs Inflation YoY

JCI vs USD-IDR

Any Questions ?

Muhamad Makky Dandytra, CSA, CFTe

Working Experiences

Currently as Junior Investment Manager at Mandiri Healthcare

3 year as Technical Analyst at Trimegah Securities, AmCapital Indonesia and Anugerah Securindo Indah

1 year as Equity Sales at Danareksa Sekuritas

Certifications

Certified Financial Technician (CFTe) from IFTA

Bronwen Wood Award 2011 from IFTA

Certified Securities Analyst (CSA) from SASB Indonesia

mmdandytra@gmail.com (+62) 813 145 45 317

Contact Information

Technical analysis ala fundamental analyst

Economy & Finance