Swiss market analysis based on technical analysis

Aktualisiert: Juni 7

Part 2

Dear investor,

We have seen that the entry price is very important when buying shares. On the other hand, we also mentioned that the risk between the entry price and any support is as small as possible. To find it all, we need technical analysis. We should best be in a bull market. It is also known that we should follow trend. "The Trend is your Friend" says a stock exchange wisdom that has taught us to buy rising stocks for a long period without large fluctuations.

Stocks that do well on the stock market also have good results. The result in the first quarter (Q1) is particularly important. This result affects the whole year. Stock prices could go up a lot after that. It forms so-called windows or course gaps. Bullish windows are the trend continuation. It also serves as support and even the whole gap is support that should not be broken. The best way to look up a window is in a candlestick chart.

In technical analysis, line and candlestick charts help us with which we can track stock prices. If we look at the chart, we find different support lines. Some are very important and we can buy there and if this falls below, we should sell shares. The old support is therefore new resistance. To make everything a little clear, let's take a look at the example of Sonova AG.

On May 21, 2019, a gap in the course (Windows) formed after Q1 (see arrow). It is important to buy shares as close as possible to this support. Since then, you could even buy and sell these shares several times. A vacuum has formed where you can easily see highs and lows in prices. In this example, the support line lasts all year round, which is actually a great security.

It is also interesting, this year after the result on May 19, 2020, a gap has also formed. This can also be a good buying opportunity. Since we still have another gap before the result, it is said that if the first support is undercut, the second gap is considered support. But anyway, if it happens that the end of the day at Sonova AG closes below 178 Swiss Francs (because of another important candle pattern), it is recommended to sell shares.

Another current example can also be found at Ams AG. Again, very important, buy closer to support as possible to reduce risk. It is said that corrections stop at the window.

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