Accumulation/Distribution
A volume-weighted calculation. It takes into account the range at which an issue is traded. Interval volume is either added (closes up) or subtracted (closes down) from the total volume.

ADX (Average Directional Movement Index)
See "Average Directional Movement Index (ADX)"

Alpha
Alpha measures a stock's average monthly move over the past 12 months relative to the S&P 500 index during this 12-month period.

For example:
1. An alpha of 0.4 means the stock outperformed the S&P 500 index by 0.4%.
2. An alpha of -0.6 means a fund's monthly return was 0.6 % less than would have been predicted from the change in the market alone.

Average
An arithmetic mean of selected stock(s). It suggests the behavior of the market or its component. For example, a very popular average is the Dow Jones Industrial Average (DJIA). It is made up of the stock of 30 different companies. The Average is determined by adding the current prices of all 30 stocks and dividing by a predetermined number.

Average Directional Movement Index (ADX)
The ADX function is part of a system developed by J. Welles Wilder to evaluate trend strength. A rising ADX suggests a trending market; a falling ADX suggests a choppy market. ADX shows trend quality, not trend direction.

Beta Coefficient
Beta measures a stock's volatility compared with the S&P 500. A Beta of 1 means the stock volatility is about the same as the S&P 500. A Beta of 3 means that the stock is three times as volatile as the S&P 500. A Beta of 0.5 means the stock is one-half as volatile as the S&P 500.

Blow-Off Top
A steep and rapid increase in price, followed by a steep and rapid drop in price. This is an indicator used in technical analysis. It may suggest that a "top" has been set!

Bollinger Bands
Trading bands are among the most widely used technical indicators in existence. They are lines drawn at fixed intervals (usually a percentage) around a moving average.

Bollinger Bands are bands that vary in distance from the moving average based on volatility. The upper band represents 'x' number of standard deviations above the average and the lower band represents 'x' number of standard deviations below the average.

By using standard deviations rather than a fixed percentage, the bands adjust for volatility. During volatile periods the bands move further away from the average, while during market lulls the bands move closer to the average.

Breadth
A technical terms you might hear in a trading room. It simply demonstrates how broadly a market is moving. If 70% of the stocks on the New York Stock Exchange rise during a given day, an analyst might say the stock market had good breadth. Typically, the number of stocks that advance is measured against the number that decline --- that's one way to monitor breadth.

Breakout
If a security price rises above a resistance level (commonly its previous high price) or drops below a support level (commonly the former lowest price), a Breakout has occurred. Analysts look at a breakout as an indication that the stock (security) will continue to move further in the same direction. It’s a possible buy or sell signal.

Bullish
Defines a market that is experiencing a prolonged rise in the prices of stocks, bonds, or commodities. Bullish can also refer to any general expectation for rising prices.

For example:
1. "The market looks bullish for the next few sessions," or,
2. "I’m bullish on XYZ stock because of a great new product they are creating."

Distribution
Sale of a large block of stock in such manner that the price is not adversely affected. A stock is considered under distribution when volume increases on days when price moves down. Technical Analysts take this as an early signal that the stock price will soon fall.

Divergence
When two or more averages or indices indicate opposing trends.

Double Bottom
Technical analysis term used to describe a pattern of support. The pattern shows a drop in price to a low point, then a rebound, followed by another drop to the initial low point. This pattern is usually interpreted to mean that the security has strong support at the low point. Forming a "Double Bottom," it should not drop further and may be ready for an rise in price.

Double Top
Technical analysis term used to describe a pattern of resistance. The pattern shows a rise in price to a high point, then a drop, followed by another rise to the initial high point. This pattern is usually interpreted to mean that the security has strong resistance at the high point. Forming a "Double Top," it should not rise further and may be ready for an drop in price.

Dow Theory
Theory that a major trend in the stock market must be confirmed by a similar pattern in the Dow Jones Industrial Average and the Dow Jones Transportation Average. Dow Theory proponents often disagree on the timing of true breakouts.

Fibonacci Support / Resistance Lines
Fibonacci projects future support and resistance levels based on previous high/low stock prices. Fibonacci lines are based on historical price movement, the difference in previous high/low stock price. Fibonacci support/resistance lines remain constant over time, while Gann Fan support/resistance lines vary with time. The Fibonacci percentages; 38.2%, 50%, and 61.8%.

Flat Market
A price pattern. Prices remain steady over a period of time, the pattern is horizontal.

Gann Fan
The Gann Fan is plotted from a major low or from a major high. It includes a series of lines fanning up from the low or down from the high. It forms four channels and prices tend to trade within a channel for long periods of time. Channel tops invite profit-taking; channel bottoms suggest good buying opportunities.

Gann Fans formed from major lows show a bullish trend: The trend strength depends on which channel the pattern is following; channel-1 indicates a low-bull trend, channel-2 indicates a moderate-bull trend, channel-3 indicates a high-bull trend, and channel-4 indicates a runaway-bull trend.

Gann Fans formed from major highs show a bearish trend: The trend strength depends on which channel the pattern is following; channel-5 indicates a low-bear trend, channel-6 indicates a moderate-bear trend, channel-7 indicates a high-bear trend, and channel-8 indicates a runaway-bear trend.

Gann Fan lines also show levels of support and resistance: In a bull trend, you can expect support at the channel bottom if prices are falling. If the price level breaks through the bottom of the channel, the strength of the trend is less. If it consolidates in the lower channel, the new support and resistance levels are shown by the lower strength channel. The same reasoning applies to bear markets, in reverse order.

Head and Shoulders
A price-chart pattern. It has this look:

1. The price reaches a high, falls back to a support level.
2. The price rises through the previous high, then falls back to the previous support level.
3. The price rises to the initial high, then falls back below the support level.

Technical Analysts consider this formation to be a very bearish indication.

Intermediate Term
Period between short-term and long-term.

Stock Analysts think of intermediate-term as 6-12 months.
Bond Analysts think of intermediate-term as 3-10 years.

Long-Term
1. Stock Analysts think of long-term as greater than one year.

2. Bond Analysts think of long-term as greater than 10 years.

Long-Term Trend
A movement in the market which is sustained over a relatively long time. There may be short-term movements in the opposite direction, however, the integrity of the long-term move is distinct. For example, the market may have a short-term decline within a much longer upward trending period.

Moving Average
Most indicators based on moving averages work best in trending markets. Sideways markets tend to cause severe whiplash with average based strategies. By adding a second displaced moving average study to a chart window (a fast and a slow), you could use crossovers as buy and sell signals.

While the conventional usage of a moving average considers price action below the average as bearish, sometimes it can represent a buying opportunity. This is often true for cases where price has dipped below the moving average and the moving average has continued in an upward trend. This type of buying opportunity would generally be accompanied by decreasing momentum in the decline.

Resistance
Price ceiling at which technical analysts note persistent selling of a commodity or security. Technical analysts think it is significant when the stocks breaks through the resistance level because that means it usually will go on to new highs. When resistance is broken, it defines a new support level and buyers face a new higher resistance level --- unless the stock is at an all-time high.

Short Term
Accounting: Assets that will are expected to be converted into cash within one year. Liabilities that come due within one year.

Techical Analysts: Stock Analysts think of short-term as less than six months. Bond Analysts think of short-term as less than three years.

Short-Term Trend
A movement in the market which is sustained for only a short time. Short-term trends can in fact occur inside a long-term trend in the opposite direction. For example, the market may have a short-term decline within a much longer upward trending period. An opposing short-term trend is the first indication of a reversal of the long-term trend.

SlowK
A stochastic function based on the tendency of price action to accumulate near the highs in an up trend and near the lows in a decline.

Support
Price levels at which buying strength overcomes selling pressure. Support levels often occur at previous market lows.

When a stock is falling towards its support level, these analysts say it is testing its support, meaning that the stock should rebound when it hits the support price. If the stock continues to drop through the support level, its outlook is considered very bearish.

Technical Analysis
Forecasting future stock price movement based of past price movements. The basic premise is that the current market price already reflects the most accurate fundamental information. Technicians analyze trends and momentum.

These terms are commonly used in world of investing to discuss the trends and targets for stock prices.
1. Average Directional Movement Index (ADX)
2. Beta Coefficient
3. Fibonacci Support/Resistance Levels
4. Gann Fan
5. Long-Term Trend
6. Resistance
7. Short-Term Trend
8. Support