Technical Analysis

Technical Analysis

⚠️ Data Verification — Do This Before Any Analysis

Before running any analysis, always retrieve the latest market data for the ticker:

1. Fetch current price — use web search or ask the user for the live price, 52-week range, and market cap. Never assume a price from training data.
2. Confirm key figures — recent earnings, revenue, key ratios (P/E, P/S, etc.) as applicable to this skill.
3. State your data source — note where the numbers came from (e.g., "Google Finance, June 19 2026") at the top of the output.
4. Flag stale data explicitly — if live data is unavailable, display this warning before proceeding:

⚠️ Live data unavailable. The following analysis uses training-data estimates which may be significantly out of date. Verify all prices and metrics before making any decisions.

Never silently substitute training-data estimates for current prices. When in doubt, ask the user to paste the latest quote.

Perform technical analysis of US stocks using price action, chart patterns, and technical indicators.

Chart Pattern Analysis

1. Trend Identification

   • Primary trend (uptrend, downtrend, sideways)
   • Trend strength and momentum
   • Support and resistance levels
   • Trendline analysis

2. Classic Chart Patterns

   • Head and shoulders, inverse H&S
   • Double/triple tops and bottoms
   • Cup and handle
   • Triangles (ascending, descending, symmetrical)
   • Flags and pennants
   • Wedges and channels

3. Candlestick Patterns

   • Reversal patterns (doji, hammer, shooting star, engulfing)
   • Continuation patterns
   • Multi-candle formations

Technical Indicators

1. Trend Indicators

   • Moving averages (SMA, EMA: 20, 50, 200-day)
   • Moving average crossovers
   • MACD (Moving Average Convergence Divergence)
   • ADX (Average Directional Index)

2. Momentum Indicators

   • RSI (Relative Strength Index)
   • Stochastic oscillator
   • Williams %R
   • Rate of Change (ROC)

3. Volume Indicators

   • Volume trends and patterns
   • On-Balance Volume (OBV)
   • Volume-weighted average price (VWAP)
   • Accumulation/Distribution line

4. Volatility Indicators

   • Bollinger Bands
   • Average True Range (ATR)
   • Volatility Index correlation

Price Levels

• Key support and resistance zones
• Fibonacci retracement levels
• Pivot points
• Round number psychology
• Gap analysis

Market Context

• Relative strength vs. market indices
• Sector rotation analysis
• Market breadth indicators
• Correlation with related assets

Moving Average Chart Analysis

When given a stock ticker, always generate an MA chart and trade recommendation table as part of the analysis. This is the first required output section.

MA Chart — Markdown Format

Retrieve or estimate recent price data and compute the following MAs:

Required output — MA Position Table:

━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
  MOVING AVERAGE CHART — [TICKER]          [DATE]
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
  Current Price : $[PRICE]

  MA       Value      vs Price    Signal
  ──────   ────────   ─────────   ───────────────────
  MA30     $[val]     ▲ +X.X%     [Above/Below] ← Short-term
  MA60     $[val]     ▲ +X.X%     [Above/Below] ← Intermediate
  MA90     $[val]     ▲ +X.X%     [Above/Below] ← Medium-term
  MA200    $[val]     ▼ -X.X%     [Above/Below] ← Long-term bull/bear
  MA365    $[val]     ▼ -X.X%     [Above/Below] ← Annual baseline
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━
  MA Stack: [BULLISH / BEARISH / MIXED]
  (Bullish = MA30 > MA60 > MA90 > MA200 > MA365)
━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━

ASCII Trend Chart (last ~90 trading days):

Price ($)
[HIGH] ┤         ╭──╮    ╭──╮
       ┤    ╭────╯  ╰────╯  ╰──╮       ← Price
       ┤────╯                   ╰──╮
       ┤·  ·  ·  ·  ·  ·  ·  ·  · ╰──  ← MA30
       ┤══════════════════════════════   ← MA60
       ┤- - - - - - - - - - - - - - -   ← MA90
[LOW]  ┤══════════════════════════════   ← MA200
       └─┬─────┬─────┬─────┬─────┬──→
       -90d  -70d  -50d  -30d  -10d  Today

Legend: ──── Price  · · · MA30  ════ MA60/MA200  - - - MA90

MA Crossover Signals

Look for and report these high-significance crossover events:

State: most recent crossover event + how many days ago it occurred.

Trade Recommendation from MA Analysis

After computing MAs, output a clear, specific trade recommendation table:

╔══════════════════════════════════════════════════════════════════╗
║              MA-BASED TRADE RECOMMENDATION — [TICKER]           ║
╠══════════════════════════════════════════════════════════════════╣
║  Current Price : $[PRICE]                                       ║
╠══════════════════════════════════════════════════════════════════╣
║  OPERATION      │ ENTRY PRICE   │ TARGET        │ STOP-LOSS     ║
║  ───────────────┼───────────────┼───────────────┼────────────── ║
║  [BUY/SELL/HOLD]│ $[price]      │ $[price]      │ $[price]      ║
╠══════════════════════════════════════════════════════════════════╣
║  Rationale: [1-sentence MA-based reason]                        ║
║  Basis:     MA[X] = $[val] acting as [support/resistance]       ║
║  R/R Ratio: 1 : [X.X]                                          ║
║  Horizon:   [SHORT / SWING / LONG-TERM]                         ║
╚══════════════════════════════════════════════════════════════════╝

Examples of well-formed recommendations:

• "$185 is a good BUY entry for AAPL — price pulled back to MA90 ($183) which held as support, targeting MA resistance at $198 with stop below MA200 ($175). R/R 1:2.1."
• "$310 is a good SELL/SHORT entry for TSLA — price rejected MA60 ($312) as resistance while MA30 crossed below MA60, targeting $275 with stop at $320. R/R 1:2.5."
• "HOLD for MSFT — price is compressing between MA30 ($415) and MA60 ($420); wait for a confirmed break above MA60 before adding."

Decision rules:

• Price above all 5 MAs in bullish stack → BUY on MA30/MA60 dips
• Price below MA200 but reclaiming MA90 → speculative BUY with tight stop
• Price below all 5 MAs → SELL/AVOID; short only if MA30 < MA60 confirmed
• Price between MAs with no clear stack → HOLD, wait for resolution

Chart Visualization Support

When --chart flag is used, include chart specifications and data tables:

1. Price Chart with Moving Averages

Chart Type: Candlestick chart with overlay lines Data Table:

Date        Open      High      Low       Close     Volume      SMA_20    SMA_50    SMA_200
2024-01-01  [price]   [price]   [price]   [price]   [volume]    [price]   [price]   [price]
2024-01-02  [price]   [price]   [price]   [price]   [volume]    [price]   [price]   [price]
...
[Last 90 trading days for detailed view]

Visual Specifications:

• Candlesticks: Green for up days, red for down days
• SMA 20: Blue line (short-term trend)
• SMA 50: Orange line (intermediate trend)
• SMA 200: Purple line (long-term trend)
• Support/resistance: Horizontal dashed lines with labels

2. Volume Bars

Chart Type: Bar chart (synchronized with price chart) Data Table:

Date        Volume      Avg_Volume_20    Above_Avg    Color
2024-01-01  [volume]    [volume]         [Yes/No]     [Green/Red]
2024-01-02  [volume]    [volume]         [Yes/No]     [Green/Red]
...

Visual Specifications:

• Green bars: Volume on up days
• Red bars: Volume on down days
• Dashed line: 20-day average volume
• Highlight bars exceeding 2x average volume

3. RSI Indicator Panel

Chart Type: Line chart with overbought/oversold zones Data Table:

Date        RSI_14    Overbought_70    Oversold_30    Signal
2024-01-01  [value]   70               30             [Neutral/OB/OS]
2024-01-02  [value]   70               30             [Neutral/OB/OS]
...

Visual Specifications:

• RSI line: Blue
• Overbought zone (>70): Red shaded area
• Oversold zone (<30): Green shaded area
• Midline (50): Dashed gray line
• Divergence annotations if present

4. MACD Indicator Panel

Chart Type: Line chart with histogram Data Table:

Date        MACD      Signal    Histogram    Crossover
2024-01-01  [value]   [value]   [value]      [None/Bullish/Bearish]
2024-01-02  [value]   [value]   [value]      [None/Bullish/Bearish]
...

Visual Specifications:

• MACD line: Blue
• Signal line: Red
• Histogram: Green (positive), Red (negative)
• Zero line: Black dashed
• Crossover markers: Arrows or dots

5. Bollinger Bands

Chart Type: Overlay on price chart Data Table:

Date        Price     BB_Upper    BB_Middle    BB_Lower    %B       Bandwidth
2024-01-01  [price]   [price]     [price]      [price]     [value]  [value]
2024-01-02  [price]   [price]     [price]      [price]     [value]  [value]
...

Visual Specifications:

• Upper band: Red dashed line
• Middle band (20 SMA): Blue solid line
• Lower band: Green dashed line
• Shaded area between bands: Light gray
• Price line: Black candlesticks

6. Support & Resistance Levels

Annotation Overlay:

Level Type       Price      Strength    Touches    Last Test    Notes
Resistance       $[price]   Strong      5          [date]       Historical high
Resistance       $[price]   Medium      3          [date]       Recent rejection
Support          $[price]   Strong      4          [date]       Key accumulation zone
Support          $[price]   Weak        2          [date]       Minor bounce level
Fibonacci 61.8%  $[price]   N/A         -          -            Retracement level

7. Pattern Recognition Annotations

Chart Overlays:

Pattern Type              Start Date    End Date      Status        Target        Risk/Reward
Head & Shoulders          2024-01-15    2024-02-10    Confirmed     $[price]      1:3.2
Ascending Triangle        2024-02-01    Current       Forming       $[price]      1:2.5
Flag Pattern             2024-02-05    2024-02-08    Complete      $[price]      1:2.8

Visual Elements:

• Pattern boundaries: Colored rectangles or polygons
• Trendlines: Dashed connecting lines
• Breakout points: Arrows indicating direction
• Target levels: Horizontal lines with labels

ASCII Chart Example (Terminal Display)

Technical Chart: AAPL (Last 30 Days)

Price ($)
180 ┤                                    ╭─╮
175 ┤                              ╭─────╯ ╰─╮
170 ┤                        ╭─────╯         ╰──╮
165 ┤                  ╭─────╯                  ╰─╮  ← Current: $172.50
160 ┤            ╭─────╯                          ╰──
155 ┤      ╭─────╯                                      SMA 20: $168.23
150 ┤──────╯                                            SMA 50: $165.80
    └──┬─────┬─────┬─────┬─────┬─────┬─────┬──          ══════ Resistance: $178
     1/15  1/22  1/29  2/05  2/12  2/19  2/26          ══════ Support: $155

RSI (14)
 70 ┤                                    ● ← 68 (approaching OB)
 50 ┤                        ●     ●
 30 ┤            ●
    └──┬─────┬─────┬─────┬─────┬─────┬─────┬──

Volume (M)
100M┤                                    █
 75M┤                              █     █
 50M┤            █     █     █     █  █  █  █
 25M┤      █  █  █  █  █  █  █  █  █  █  █  █
    └──┬─────┬─────┬─────┬─────┬─────┬─────┬──

Signals:
↗ Bullish: Price above SMA 20 & 50
● RSI approaching overbought (68) - potential pullback
📊 Volume increasing on up days - healthy uptrend
🎯 Target: $178 (resistance), Stop: $165 (below SMA 50)

Integration with Report Generator

When --chart flag is used, output is optimized for /report-generator:

• All chart data tables formatted for Chart.js/Plotly
• Color schemes specified for consistent visualization
• Annotations and overlays clearly defined
• Time axis formatting (date range, granularity)
• Y-axis scaling recommendations (log scale for long-term charts)

Chart Configuration Recommendations

Timeframe Selection:

• Day Trading: 1-minute to 1-hour candles, last 5-10 days
• Swing Trading: 4-hour to daily candles, last 3-6 months
• Position Trading: Daily to weekly candles, last 1-3 years

Indicator Combinations:

• Trend Following: SMA 50/200 + MACD + ADX
• Mean Reversion: Bollinger Bands + RSI + Stochastic
• Momentum: RSI + MACD + Volume
• Breakout: Bollinger Bands + Volume + Pattern Recognition

Multi-Timeframe Analysis (MTF)

Framework

Analyze 3 timeframes simultaneously — higher timeframe establishes the trend, primary timeframe identifies the setup, lower timeframe refines the entry. Trade only in the direction of the higher timeframe trend.

Trading Setups by Approach

MTF Alignment Scoring

MTF Confluence Table

MTF Integration with --chart Flag

When --chart is used, MTF analysis adds the following data tables for report generation:

MTF Summary Table:
Timeframe   Candle   MA Trend    RSI     MACD       Volume Trend   Signal
Weekly      [data]   [Up/Down]   [val]   [Bull/Bear] [Rising/Fall]  [Bullish/Bearish/Neutral]
Daily       [data]   [Up/Down]   [val]   [Bull/Bear] [Rising/Fall]  [Bullish/Bearish/Neutral]
4-Hour      [data]   [Up/Down]   [val]   [Bull/Bear] [Rising/Fall]  [Bullish/Bearish/Neutral]
Alignment Score: X/3

Rule: Never take a trade rated 1/3 or lower on MTF alignment. Wait for 2/3 minimum before entry.

Volume Profile Analysis

Key Concepts

• Point of Control (POC): The price level with the highest volume traded over the selected period. Acts as a magnetic price level — markets frequently return to and consolidate around the POC.
• Value Area (VA): The price range where approximately 70% of total volume was traded. Defines the "fair value zone" as agreed upon by market participants.
• Value Area High (VAH): Upper boundary of the Value Area. Strong resistance when price is approaching from below.
• Value Area Low (VAL): Lower boundary of the Value Area. Strong support when price is approaching from above.
• Low Volume Node (LVN): A price range with minimal volume. Price passes through LVNs quickly — acts as a gap zone.
• High Volume Node (HVN): A price range with dense volume. Price is magnetically attracted and consolidates around HVNs.

Volume Profile Shapes

Volume Profile Trading Rules

Session vs. Composite Profile

• Session Profile: Volume profile for a single trading day or week. Identifies intraday POC, VAH, VAL.
• Composite Profile: Aggregated over weeks, months, or custom date range. Identifies major structural levels.
• Integration rule: Composite HVNs = major structural support/resistance levels. LVNs = breakout acceleration zones. Session POC = short-term magnet.

Advanced Indicators: Ichimoku Cloud

Five Components

The shaded area between Senkou Span A and Senkou Span B is the Kumo (Cloud).

Bullish Ichimoku Signals

Bearish Ichimoku Signals

Kumo Twist

• A Kumo Twist occurs when Senkou Span A and Span B cross — changing the cloud color from green to red (bearish twist) or red to green (bullish twist).
• The cloud is plotted 26 periods ahead, so a Kumo Twist is an early warning signal visible in advance.
• Thin cloud: Weak support/resistance — price can break through easily.
• Thick cloud: Strong support/resistance — price will struggle to penetrate.

Ichimoku Signal Strength Matrix

Options Flow Integration

Put/Call Ratio Interpretation

The Put/Call ratio measures options market sentiment — the ratio of put volume to call volume on a given day.

CBOE Total P/C vs. Equity-Only P/C: Equity-only P/C more directly reflects retail/institutional directional bets (excludes index hedging).

Unusual Options Activity (UOA) Signals

• Large block trades: Single orders of 500+ contracts, especially OTM (out-of-the-money)
• OTM sweeps: Aggressive market orders sweeping multiple exchanges at ask — directional conviction
• Dark pool prints: Large, off-exchange block prints can signal institutional accumulation/distribution
• Short-dated OTM calls on takeover candidates: One of the most reliable pre-announcement signals
• Key UOA filters: Volume > 5x open interest, expiry within 30 days, OTM strike, market order execution

Implied Volatility (IV) vs. Historical Volatility (HV)

• IV Rank (IVR): Current IV relative to its 52-week range. IVR > 50 = elevated; IVR < 25 = depressed.
• IV Percentile: % of days in the past year where IV was lower than current. More robust than IV Rank.

Max Pain Theory

• Max Pain = The strike price at which the total value of all outstanding options (puts and calls) would expire worthless — the price that causes maximum loss for option buyers.
• Near expiration, market prices have a tendency to gravitate toward the max pain level (due to dealer hedging flows).
• Most useful in the final 5–7 days before monthly options expiration (OPEX).
• Application: If stock is significantly above max pain near OPEX, short-term mean reversion is possible.

Gamma Exposure (GEX) and Spot Price Impact

• Gamma measures how much a dealer's delta changes per $1 move in the underlying.
• Positive GEX (Dealer Long Gamma): Dealers buy into dips and sell into rallies — suppresses volatility, market stays range-bound.
• Negative GEX (Dealer Short Gamma): Dealers sell into dips and buy into rallies — amplifies moves, increases volatility.
• GEX Flip Level: The price at which market transitions from positive to negative gamma — crossing this level can accelerate directional moves.
• Practical rule: Low realized volatility + tightening range = likely high positive GEX environment. Breakouts become more powerful when negative GEX zone is entered.

Note: This section provides interpretive framework. Actual real-time options flow data, IV readings, and GEX levels must be sourced from the user's options data provider (e.g., Market Chameleon, Unusual Whales, SpotGamma, Thinkorswim).

Output

Provide technical analysis report with:

• Current trend and momentum assessment
• Key chart patterns identified
• Support and resistance levels
• Technical indicator signals
• Volume and volatility analysis
• Entry/exit points and price targets
• Stop-loss recommendations
• Risk/reward ratio for trade setups
• Time horizon (short-term, swing, position trading)
• MTF alignment score and summary table
• Ichimoku Cloud status (price above/below/inside cloud)
• Volume Profile POC, VAH, VAL levels

Enhanced Output (with --chart flag)

• All standard output sections above
• Chart data tables for price, volume, and indicators
• MTF confluence table with signal direction per timeframe
• ASCII charts for terminal display
• Pattern recognition overlays with annotations
• Support/resistance level visualizations
• Volume Profile data (POC, VA, LVN/HVN zones)
• Technical indicator panels (RSI, MACD, Bollinger Bands, Ichimoku)
• Chart specifications for HTML report generation
• Color-coded signals (bullish/bearish/neutral)

Keep analysis objective and data-driven, avoiding emotional bias.

Standard Signal Output

All analysis concludes with this standardized block:

## Thesis Invalidation

After delivering the analysis signal, specify what would reverse it:

**If signal is BULLISH — thesis breaks if:**
- Price closes below the MA200 / key support level identified in this analysis on above-average volume
- MA30 crosses below MA60 (death cross) AND RSI drops below 40
- Macro regime shift: Fed pivots hawkish unexpectedly, recession probability >60%

**If signal is BEARISH — thesis breaks if:**
- Price closes above key resistance / MA200 level with volume confirmation
- price reclaims MA200 AND MA30 turns up AND volume confirms
- Fundamental improvement: surprise earnings beat >20% with guidance raise

**Re-run this analysis when:**
- [ ] Next earnings release
- [ ] Price moves ±15% from current level
- [ ] 60 days have elapsed
- [ ] Material news event (acquisition, leadership change, regulatory decision)

╔══════════════════════════════════════════════╗
║              INVESTMENT SIGNAL               ║
╠══════════════════════════════════════════════╣
║ Signal:      BULLISH / NEUTRAL / BEARISH     ║
║ Confidence:  HIGH / MEDIUM / LOW             ║
║ Horizon:     SHORT / MEDIUM / LONG-TERM      ║
║ Score:       X.X / 10                        ║
╠══════════════════════════════════════════════╣
║ Action:      BUY / HOLD / SELL               ║
║ Conviction:  STRONG / MODERATE / WEAK        ║
╚══════════════════════════════════════════════╝

Score Guide: 8.0–10.0 Strongly Bullish | 6.0–7.9 Moderately Bullish | 4.0–5.9 Neutral | 2.0–3.9 Moderately Bearish | 0.0–1.9 Strongly Bearish Confidence: HIGH (strong data, clear signals) | MEDIUM (mixed signals) | LOW (limited data, conflicting signals) Horizon: SHORT-TERM (1 week–3 months) | MEDIUM-TERM (3 months–1 year) | LONG-TERM (1+ years)