Using Technical Analysis in
Securities Trading: Evidence from Bulgaria
Technical Analysis
Ivaylo Penev, CFA
Portfolio Manager, ELANA Fund Management

What is technical analysis?
Method of evaluating securities by analyzing statistics generated by market activity, such as past prices and volume.
Market action is defined by:
 Price action
 Volume
 Open Interest

What is technical analysis?
Price action – price dynamics during a period
Volume – the amount of shares/contracts traded for a period
Open Interest – the number of options/futures contracts that are not closed or delivered on a particular day

Premises of technical analysis
 Price movements represent all the information available
 Prices move in trends
 History repeats itself

Technical analysis - charts
 Line charts
 Bar charts
 Candlestick charts
 Dot charts
 Point and figure charts

Technical analysis – line chart

Technical analysis – bar chart

Technical analysis – candlestick chart

Technical analysis – candlestick

Technical analysis – reversal patterns
Doji

Technical analysis – reversal patterns

Technical analysis – reversal patterns
Engulfing

Technical analysis – reversal patterns

Technical analysis – reversal patterns
Evening and morning stars

Technical analysis – reversal patterns

Technical analysis – moving average

Technical analysis – Fibonacci retracement

Technical analysis – Bollinger bands

Technical analysis – trend line

Technical analysis – trend channel

Technical analysis – head and shoulders

Thank you for your attention