CluenexTechnical Analysis
Charts, indicators and price patterns: what each one measures and where it fails. 28 guides, each with a short answer up top and sources at the bottom.
All guides
- Backtesting a Seasonal Trade: Why Everyone-Knows Setups FailA seasonal trade built on a widely known, calendared event usually fails a fair backtest because the expectation is already in the price. Any gain that remains is typically small, based on few observa
- Bollinger Bands Explained: How to Read Squeezes and BreakoutsBollinger Bands are a volatility indicator: a 20-period simple moving average with an upper and lower band set 2 standard deviations away. Narrow bands mean volatility is low, wide bands mean it is hi
- Breakout vs Fakeout: How to Tell a Real Breakout From a False OneA breakout is real when price closes above resistance on clearly higher than normal volume and keeps holding that level in the following sessions. A fakeout pushes through briefly, then falls back int
- Candlestick Patterns Explained: How to Read 12 Common OnesA candlestick shows one period's open, high, low and close. Patterns like the hammer, engulfing and morning star describe a shift in buyer and seller control, but they are context, not guarantees. Pub
- Fair Value Gaps (FVG) Explained: What They Are and Their LimitsA fair value gap (FVG) is a zone on a chart where price moved so fast that the first and third candles of a three-candle run do not overlap. Traders treat it as an imbalance price may revisit, but the
- Fibonacci Retracements Explained: Levels, Math and LimitsA Fibonacci retracement divides a prior price move by ratios such as 38.2%, 50% and 61.8% to mark possible pullback levels. Traders use them as reference zones. Research has not shown they reliably pr
- Golden Cross vs Death Cross: What the 50 and 200-Day Cross Tells YouA Golden Cross happens when a stock's 50-day moving average rises above its 200-day moving average. A Death Cross is the reverse. Both are lagging signals that confirm a trend already under way, so th
- Head and Shoulders Pattern: What It Is and How Reliable It IsA head and shoulders pattern is a chart shape with three peaks, a higher middle peak (the head) between two lower ones (the shoulders). A close below the neckline, the line joining the two dips, is re
- How Fed Rate Decisions Affect Stock Prices, and Why Expectations MatterThe Federal Reserve's rate decisions affect stocks mainly by changing the discount rate used to value future profits and the cost of borrowing. Markets price expected moves in advance, so surprises an
- How to Analyze Semiconductor Stocks: Cycles, Lead Times, InventorySemiconductor stocks are cyclical: demand surges, companies add capacity, supply overshoots, then inventory gets worked off. Track lead times, customer inventory, capital spending and company guidance
- How to Draw Trendlines Correctly: Rules and Common MistakesA trendline is a straight line connecting at least two swing lows in an uptrend, or two swing highs in a downtrend. A third touch confirms it. A close beyond the line on heavy volume suggests the tren
- How to Evaluate AI Stocks: Metrics That Matter Beyond HypeJudge an AI stock by whether AI spending turns into reported revenue, margins and free cash flow. Check capital spending as a share of revenue, the revenue line tied to AI, operating margin trend, cus
- How to Read an Earnings Report: EPS, Revenue and GuidanceAn earnings report shows a company's profit per share (EPS), revenue and outlook for the future. Stocks react to results versus analyst expectations, not versus last year, so guidance, margins and ear
- How to Spot a Pump and Dump: Five Structural Warning SignsA pump and dump is securities fraud in which promoters build a position in a thinly traded stock, hype it to push the price up, then sell into the buying. Warning signs are structural: tiny float, thi
- How to Use MACD and RSI Together: What the Pair Can and Can't Tell YouMACD shows when momentum changes direction, and RSI shows how stretched a recent move is. Reading them together can filter some weak signals, but no published rule guarantees a win rate, so test any c
- MACD Explained: How the Indicator Is Built and Where It FailsMACD (Moving Average Convergence Divergence) is the 26-period exponential moving average of price subtracted from the 12-period one, plotted with a 9-period signal line. It shows whether momentum is s
- Moving Averages Explained: SMA, EMA and Crossovers in Plain EnglishA moving average is the average closing price over a set number of periods, recalculated each period, which smooths out daily noise so the trend is easier to see. A crossover happens when a faster ave
- Order Blocks Explained: What They Are and Where They FailAn order block is the last opposing candle before a sharp price move, which some traders treat as a zone where large institutions placed orders. The idea comes from retail trading communities, not pee
- P/E Ratio Explained: Is a Stock Expensive, and How to Judge ItThe P/E ratio is a stock's price divided by its earnings per share over the past 12 months. A P/E of 20 means you pay $20 for each $1 of yearly profit. There is no universal good number: compare it to
- Support and Resistance Levels: How to Find Them and Their LimitsSupport is a price area where a falling stock has repeatedly paused because buyers stepped in. Resistance is an area where a rising stock has stalled because sellers appeared. Both are zones, not exac
- The Memory Chip Cycle: Why Memory Stocks Boom and BustMemory chips (DRAM and NAND) are a commodity, so no maker can set its own price, and fab costs are mostly fixed. Prices and profits therefore swing sharply: Micron lost $5.83 billion in fiscal 2023, t
- Volume Analysis Explained: How Volume Confirms or Questions a Price MoveVolume is the number of shares traded in a period. A price move on volume well above its recent average, such as 1.5x to 2x the 20-day average, shows broad participation. A move on below-average volum
- What Do Options Flow Headlines Really Tell You?Options flow alerts report that a large options trade happened, with its strike, expiration, size and direction, but not why. Headline dollar figures usually quote notional value (contracts x 100 x st
- What Is Relative Strength? How to Compare a Stock to the MarketRelative strength (RS) compares a stock's performance to a benchmark, usually the S&P 500. Divide the stock's price by the index level: if the line rises, the stock is beating the market. It describes
- What Is RSI? How the Relative Strength Index Works and Its LimitsRSI (Relative Strength Index) is a momentum indicator from 0 to 100 that compares a stock's recent average gains to its average losses, usually over 14 periods. Readings above 70 are conventionally ca
- What Is Short Interest and How Does a Short Squeeze Work?Short interest is the number of a company's shares that investors have sold short and not yet bought back, often shown as a percent of float. A high reading, such as 20% of float or more, means many t
- What Is Smart Money and Can You Really Track It on Charts?Smart money is a loose label for large, well-resourced investors such as hedge funds, mutual funds and pension funds. Charts can only hint at their activity through volume and price. Public filings li
- What Is the VIX? The Market's Fear Index and What It Can't Tell YouThe VIX is Cboe's index of expected S&P 500 volatility over the next 30 days, calculated from option prices. A reading of 20 means options imply roughly a 5.8% move up or down over 30 days. It measure