PLS (ASX) PLS chart

Originally posted by Darkstone: ↑

Go back through the posts in this thread over the last few weeks. You will find the chartists generally explain how to read the charts and the signals, and what our various targets are. We do not all agree all the time, and there is usually only a probability that each estimate or recognised pattern is correct - so it is an exercise in balancing odds versus risk.

Key abbreviations you will encounter:

SP - share price
Candle - the chart with little boxes and wicks at the top and / or bottom

SMA simple moving average
EMA exponential moving average
RSI relative strength index (usually covering the previous 14 periods)
MACD moving average convergence divergence
Wyckoff - a charting method involving complex recognition - you would need to read up on the web

EW - Elliot waves - a method of counting waves on a chart to get expected targets.

Here are the five core EW patterns:

Fib - Fibonacci number pattern turned into percentages, used to calculate targets for rises and falls based on previous wave heights (23%, 38% 50% 61% 78%, approx.). In the EW method differing wave numbers have differing fib targets. Eg wave 3 from wave 1 is likely to be at least 161% of wave 1, the retrace on wave 3 (wave 4) has a high probability of being 38%, etc.

Support & Resistance - the previous high of a wave is the resistance of the next fall, while the previous bottom of a fall is the support of the next fall, etc
Gap (up) - the difference between the high of a day and the opening of the next day, (and vice versa for Gap down). The SP has a tendency to try and fill a gap by moving to it later. Once filled that may become a bounce point.
Channel the parallel lines drawn joining two or more tops and two or more bottoms of a set of waves. Immediate prices tend to move within the pre-established channel. You will get channels within channels.
Rising and falling wedges - as with channels but forming an inclining or declining wedge shape. SP tends to break 2/3 along towards the tip and tends to break up if the wedge is declining and down if inclining (target 50% top 100% of the wedge height)
Flags / pennants - slightly more complex shapes comprising a rising channel and a falling channel (or vice versa) where the target is the height of the flag pole on the break. The falling flag breaks up, the rising flag breaks down.

Here is my simplified cheat sheet of chart patterns when people ask about this:

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This bit was really badly worded: "Support & Resistance - the previous high of a wave is the resistance of the next fall, while the previous bottom of a fall is the support of the next fall, etc". I'll try again.

Support & Resistance: Support is that price where demand rallies or selling reaches exhaustion and the price stops falling, while resistance is the reverse on a rising price. As a pattern, the previous high becomes support in the following falls (once it has been exceeded) and the previous low becomes resistance in following rises (once it has been exceeded), similarly highs indicate a resistance to a rise, so immediately following fluctuations are likely see that point as a resistance as well, while previous lows tend to indicate the point at which at that time where the market found a temporary true value and support tends to recur at that price next time the SP falls to that place. So in a falling market resistance occurs at both the highs and lows of the rising market (for different reasons). This behaviour is stronger the more recent the high or low.