Technical Analysis Explained: The Successful Investor's Guide to Spotting Investment Trends and Turning Points

by Martin J. Pring

Quick Summary

Pring's encyclopedic reference, now in its fifth edition, is one of the most comprehensive single-volume treatments of technical analysis available. The book covers trend-determining techniques (trendlines, moving averages, momentum indicators, Bollinger Bands, candlestick and point-and-figure charting), market structure analysis (breadth, volume, sector rotation, secular trends, cycles), and broader market analysis (sentiment, contrary opinion, interest rates, international markets, automated trading systems).

Detailed Summary

Martin Pring's "Technical Analysis Explained" is widely regarded as one of the most complete and authoritative single-volume references on technical analysis. The fifth edition updates and expands a work that has been a standard reference since its first publication.

Part I covers trend-determining techniques across 20 chapters. Chapter 1 defines the three types of trends (primary, intermediate, short-term) and how they interact. Chapter 2 connects market trends to the business cycle, showing how stocks, bonds, and commodities move through predictable phases relative to economic expansion and contraction. Chapter 3 covers Dow Theory, the grandfather of all trend-following methodologies. Chapter 4 establishes typical parameters for intermediate trends.

Chapters 5-7 cover support and resistance zones, trendlines (construction rules, significance assessment, measuring techniques, fan principle), and volume characteristics. Chapter 8 provides extensive coverage of classic price patterns: head and shoulders, triangles, rectangles, double/triple formations, flags, pennants, wedges, and rounding patterns. Chapter 9 covers smaller patterns and gaps. Chapter 10 addresses one- and two-bar reversal patterns.

Chapters 11-16 cover indicators: moving averages, envelopes and Bollinger Bands, and three full chapters on momentum (basic principles, and two chapters of individual indicator analysis covering RSI, MACD, stochastic, rate of change, CCI, Williams %R, and others). Chapters 17-18 cover candlestick charting and point-and-figure charting. Chapter 19 discusses relative strength, and Chapter 20 integrates all indicators through a case study of the DJ Transports from 1990-2001.

Part II covers market structure. Chapters 21-22 analyze price action in major averages and sector rotation. Chapters 23-25 cover time analysis: secular (long-term) trends in stocks, bonds, and commodities; cycles and seasonal patterns; and practical cycle identification. Chapter 26 covers volume indicators, and Chapter 27 addresses market breadth.

Part III covers additional aspects: confidence indicators and intermarket relationships, sentiment measurement, contrary opinion integration, interest rate effects on stocks, technical analysis for individual stock selection, international market analysis, automated trading systems, and checklists for identifying primary market peaks and troughs.

The book's comprehensiveness is both its strength and its challenge -- it is over 600 pages of dense technical material. But for serious practitioners who want a single reference that covers virtually every technical analysis topic, Pring's work has few equals.