Technical Screeners
Indicators
Alligator - It is the indicator developed by Bill Williams. Alligator indicator has three lines - teeth, jaws and lips. The three lines are smoothed moving averages of different periods. Alligator sleeps when market is in range and awakens when trend begins.
Bollinger Bands (BB) - are trading bands developed by John Bollinger. BB consists of three lines - the middle band, upper band and lower band. The centerline is a moving average while price channels above and below are standard deviations. The upper band acts as an area of resistance and lower band acts as an area of support.
Relative Strength Index (RSI) - It is a momentum oscillator used in sideways or ranging markets where price moves between support and resistance levels. It ranges between 0 and 100. Indicates oversold below 30 and overbought above 70.
Moving Average Convergence Divergence (MACD) - It is an indicator created by Gerald Appel. MACD default setting is 26/12/9. MACD line is created by subtracting 26 period EMA and 12 period EMA. The signal line is created with 9 period EMA of the MACD line. MACD line crossing from below to above the signal line is considered bullish while MACD line crossing from above to below the signal line is considered bearish.
Average Directional Index (ADX) - It measures the strength and direction of trend. It is measured on scale 0 to 100. ADX below 20 indicates weak trend and above 50 strong trend. Trend direction either up or down is determined by + DI and - DI lines.
Chart Patterns
Double Top - It is a reversal pattern which occurs following an extended uptrend. The name is given to pair of peaks which are formed when price is unable to reach new high. The two peaks need not be equal in price, but should be in the same area with a minor reaction low between them. It is a reliable indicator of potential reversal to the downside.
Double Bottom - It is a reversal pattern which occurs following an extended downtrend. The two lows formed need not be equal in price but are in the same area with minor reaction high between them. It is a reliable indicator of potential reversal to the upside.
Head and Shoulder - It is a reversal pattern which occurs following an extended uptrend. Its completion indicates trend reversal. The pattern contains three successive peaks with middle peak(head) being the highest and two outside peaks(shoulders) being low and roughly equal. The reaction lows of each peak can be connected to form support or neckline.
Inverted Head and Shoulder - It forms after the downtrend, and its completion marks change of trend. The pattern contains three troughs in a successive manner with two outside troughs right and left shoulder being lower in height than the middle trough(head) which is the deepest. The two shoulders should be roughly equal in height and width. The reaction high of the pattern can be connected to form resistance or neckline.
Rounded Top- It consists of gradual change in trend from up to down. The price forms a bowl shaped pattern as the trend changes from upward to downward.
Rounded Bottom - It consists of gradual change in trend from down to up. The price forms a bowl shaped pattern as the trend changes from downward to upward.
Candlestick Patterns
Doji - It is formed when opening and closing are equal. Looks like plus sign, cross or inverted cross. Doji is a tug of war between buyers and sellers. Neither buyer or seller could gain control. Doji indicates indecision. Check next day candle to confirm the trend.
Hammer - It is formed in the downtrend when bulls start to step into the rally. The lower shadow of the hammer is minimum twice the length of the body. There is no upper shadow or very small upper shadow. The real body color does not matter. Green body is more bullish than the red body. The following day needs to confirm hammer signal with strong bullish day.
Hanging Man - It is formed in the uptrend. The real body color can be green or red. It signifies potential top reversal, requires next trading session confirmation. Hanging man has little or no upper shadow.
Bullish engulfing - It is a bullish pattern formed in the downtrend. It signifies buyers are overpowering the sellers. The pattern consists of small red candle followed by large green candle that engulfs the previous small red candle.
Bearish engulfing - It is a bearish pattern occurs when sellers are overpowering the buyers. The pattern consists of small green candle followed by large red candle that engulfs the previous small green candle.
Morning Star - It is a bottom reversal pattern occurs in the downtrend. It signifies price is going to go higher. It is a three-candle pattern. The first candle is tall red, second candle has small red body gaps below to form a star and the third candle is green with close at least halfway up the first red candle. It shows the bulls have stepped in.
Evening Star - It is the top reversal pattern occurs in the uptrend. It signifies price is going to decline. It is a three-candle pattern. The first candle is tall green, second candle has small green real body gaps above first to form a star and the third candle is red with close at least halfway down the first green candle. It shows the bears have stepped in.