Types of charts

These quotations are placed in the vertical axis and in the horizontal axis the different falls and raises of the security or index of group of securities are reflected through time. When a significant rise is produced a star or cross is put and when there is a fall a circle is noted. Every time that a security experiments a fall or rise they will be noted with a cross or a circle on the same vertical line until there is a change in its tendency. When this happens, it is reflected on the right column.

Characteristics of this kind of charts:

• It only has in account the prices or indexes, not considering the trading volumes.
• Variations inferior to the 3% are not taken in account.
• They only resume the information relative to variations, leaving aside other important information.
• They don’t take in account the variable of time. You can see the falling and climbing tendencies but not have the duration of the same.
• The figures that are formed permit to detect tendency lines, support lines and resistance lines.

The support line is made by joining two or more minimums and it gives you the sign to sell when the prices of the security begins to fall (penetration), indicating that a tendency might be ending on the contrary, the resistance line is made by joining. Two or more maximums and it gives you the sign to buy when the price of the security is rising. They are detected when the security in rice bounces back at reaching that high level, part it is   due in the investors that think that it is too high and thus they sell their securities.

If in spite to the selling pressure the price keeps on rising and surpasses the resistance line this pressure will be reduced. For this reason, when a security passes this line there will be a free rising. The contrary could be said about the support lines.

To emphasize on what is denominated as pull-back: It is the same line that at first is considered as a resistance line, it breaks and becomes into a support line.

 - Figures that can be obtained:

• Crests of peaks: they announce selling signals
• Valleys of backgrounds: They announce buying signals
• Ascending triangles: They announce buying signals
• Descending triangles: They announce selling signals.

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