My Tech Analysis, am I on the right track? (includes chart)

[domi]

Hi everyone.
This is my first post and I'm glad to be here. I've read a fair few posts on the forum, but I figure there is no substitute for getting an opinion on your analysis (or wild guess, heh).

I'm paper trading at the moment, so thankfully I'm not going to lose anything if I bungle!

The below chart is, in my opinion, showing the following:

1) An initial downward trend
2) An inverse head-and-shoulders, indicating possible trend reversal
3) A logical buy point being suggested by the stochastic
4) A sell point being dictated by a huge spike in price, which will probably cause a downward bounce against the previous upward trend

Any thoughts on my reading of this would be greatly appreciated! Also, I'm not sure what should constitute 'meaningful' when referring to volume (as suggested by the last volume notation). Any suggestions or advice will be humbly accepted.

Without further ado:

 

[JackJackJack]

Technical analysis is great in hindsight - but theres a big difference in looking at a chart and saying tommorow this stock is going to do this because of today's volume or stochastic or chart pattern X or MACD etc.

 

[tech/a]

Whats the chart.
Ill post up one marked with comments if you like.
The way I see it going forward rather than in hindsite.

FYI
Your analysis is OK but some is not what I'd use.
H/S is just not there.
Stochasic is fine but not something I use.
This stock is in a corrective pattern no trend.
You missed both the double bottom and the double top.
Hence support and resistance.

 

[domi]

First up, thank you for taking the time to have a look!

I'm trying to learn the basics of TA, so no doubt I'm going to get all sorts of things wrong!

Whats the chart.

This is just an example of the 'Sample Data' provided by Market Analyst. The stock is TLS (Telstra).
Top is a bog-standard linear HLC chart, followed by volume histogram and line stochastic.

Ill post up one marked with comments if you like.
The way I see it going forward rather than in hindsite.

That would be brilliant. I know that I'm not going to make and money by knowing how to recognise things in hindsight, but in order to work out what to look for, I thought it would be useful to examine existing data.

H/S is just not there.
This stock is in a corrective pattern no trend.

I'm probably looking for patterns where none exist. I get a proper data feed next week, so perhaps diversifying the stocks I'm able to examine will make this more obvious.

You missed both the double bottom and the double top.
Hence support and resistance.

Would I be correct in saying that there are patterns similar to inverse/bottom H/S, double top, and double bottom, but that they are of little to no worth due to the absence of any real trend to begin with?

Thanks again for your patience and advice - it is damn helpful, since books can't talk back!

 

[tech/a]

Would I be correct in saying that there are patterns similar to inverse/bottom H/S, double top, and double bottom, but that they are of little to no worth due to the absence of any real trend to begin with?

No everything tells a story in "Context".
The best thing you can do is let the story unfold and don't read into it what you think or want to see.
Ill mark up TLS and we can analyse it going forward.
The good the bad and the ugly.

 

[tech/a]

No everything tells a story in "Context".
The best thing you can do is let the story unfold and don't read into it what you think or want to see.
Ill mark up TLS and we can analyse it going forward.
The good the bad and the ugly.

TLS

 

[Logique]

Don't mind the use of stochs in combo with other indicators. Don't quite see the H&S pattern.

The failure of the spike above 3.40, and afterwards only able to make a lower high at 3.35 - would have sent investors packing.

To my eye the pattern that jumps out is a double bottom, 2.90-3.20, breakout target 3.50, which didn't hold = bearish