Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You may use any online charting tools to plot the charts. Look at the current (latest) stock price and set your preferred time frame to

You may use any online charting tools to plot the charts. Look at the current (latest) stock price and set your preferred time frame to view (one year, more than a year, past several months etc.)

The Task

Produce a daily OHLC bar or Candlestick price chart on one of these five stock (D US Equity / ED US Equity / WEC US Equity / AEE US Equity / CMS US Equity ). Then, add

(1)Two moving averages (it can be simple moving averages or exponential moving averages, with one faster and one slower). You can choose any parameter (number of days, simple or exponential) you prefer.

(2)Trend lines over the period covered. It can be up trend line, down trend line or channel that you observe from the chart.

(3)Technical indicator(s) such as RSI or MACD.

Note: after you have done the drawing, capture the screen and save as picture and then work with your saved pictures. You can use ANY charting app

On your chart,

1. Identify and mark the current key support and resistance levels. They should include the immediate support/resistance level and the next support/resistance levels. Current means you are focusing on the current or latest price level, do not mention the support or resistance levels when the price was, say, several months ago in the earlier part of the chart. However, if these past support or resistance levels are important, they can be used for current support/resistance and price targets. Note: support and resistance can be determined from trend lines, price movement, price pattern, moving averages etc. (Example) The current price of AAPL is $138.38, the immediate resistance is $144.13 (marked by the gap on 3 Nov and the low on 27 Oct), followed by the next resistance at $149.45 (50D SMA) and $151.63 (100D SMA, and more important at $156.45 (200D SMA)). The immediate support is provided by the double bottom at $134.92 and then more important at $130 (the low in 22 months). The next support level is found at about $124 (the lows in May-Jun 2021). [you can also find the series of successive support/resistance levels from the moving averages or other price reference points]

2.Is there any trading signal given by the RSI or MACD over the PAST period you covered? Explain. For example, you may identify a bullish divergence or MA crossover in the middle of the chart. You can say no signal provided if you cant find any. 3.Apply any technical analysis tool and patterns analysis (note the cluster of evidence is important), look through the chart to identify and comment on any buy or sell signal with respect to the current price (the last or latest bar on the chart), or would stay neutral at the current price. That is, you have to make prediction about the future direction of the price. Then, suggest a trading strategy: the entry price level (with reasons) and the exit price level for both profit-taking price target(s) and for stop loss price (with reasons). If you would like to stay neutral or wait for further confirmation, you may suggest what important levels to watch and potential action to take. (Example: you can trade in any time frame, long term or short term with different price targets) AAPL is now trading in a triangle looking to breakout. The bias is for it to break out downwards. Firstly, the general market sentiment is still weak. AAPL is trading below most of the moving averages and still within the downtrend since the all-time high reached in Jan 2022. Secondly, the MACD started to cross over the signal line form above, that is a bearish sign. The gap down on 3 Nov indicates strong selling pressure. Therefore, I will take a short position now at the current price of $138. The first price target is $130 (bottom of the down trend channel since Aug 2022 and the lowest price of 2022), then the next support level at $124 (the lows in May-Jun 2021). If it fails, my stop loss is set at the break of the gap at $144 on 3 Nov. Or, I may close another half of the position on a break of the 50DSMA currently at $149.45 [This is just a brief example. MORE description and analysis of the price levels for both take-profit and cut-loss and your suggestion of the plan of buy or sell action are required]

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Corporate Valuation A Guide For Managers And Investors

Authors: Phillip R. Daves, Michael C. Ehrhardt, Ron E. Shrieves

1st Edition

0324274289, 978-0324274288

More Books

Students also viewed these Finance questions

Question

1. Let a, b R, a Answered: 1 week ago

Answered: 1 week ago