Chapter 10
Harnessing the Power of Overlays
IN THIS CHAPTER
Using moving averages
Creating channels for prices to move
Checking out horizontal support and resistance
As stock prices wiggle up and down, you may find it hard to recognize a trend. Overlays — which are display formats added to stock charts that help you understand price movement — can smooth out that trend to make your reading of the charts easier. Overlays can also help you see when the big picture is getting stronger. More importantly, regardless of the news around you, the overlays can help you see when extremes in price movement are occurring.
Using overlay tools and adjusting the settings to create a method you’re comfortable with make charting more valuable. The overlay tool can help you find better entries and exits by understanding the price patterns in a stock. In this chapter, you find out how to use overlays in three different tasks: tracking moving averages, trying channel investing, and noting support and resistance. (Chapter 3 introduces overlays and other chart settings.)
It’s critical to keep in mind ...
Get Stock Charts For Dummies now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
