Technical Analysis contains many terms with specific meanings.
Some of them are described here.

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G

GAP

A gap forms when opening price movements create a blank spot on the chart. This happens when today’s high is below the previous day’s low, or when today’s low is above the previous day’s high. So a gap occurs when the price of a stock moves very sharply up or down with no trading in between. Therefore, its chart shows a break between the prices--there is no line connecting the points. Gaps are especially significant when accompanied by an increased trading volume.

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GAP - BREAKAWAY

Breakaway gaps signal a potential change in trend and are especially significant when accompanied by an increase in volume. There are two types of breakaway gaps. A bullish breakaway gap forms when a security gaps up after an extended decline. Bullish breakaway gaps can also occur after an extended base or consolidation period. A bearish breakaway gap forms when a security gaps down after an extended advance. Bearish breakaway gaps can also form after an extended top or consolidation period. Breakaway gaps usually occur at the completion of a significant price pattern: for example, a head and shoulders pattern. They may be partially filled, but usually not entirely.

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GAP – COMMON

Common gaps occur within a trading range or shortly after a sharp move as a reaction. These gaps do not signify the beginning or continuation of a move, but rather represent anomalies. For instance, if a security has declined 20% in a week and gaps up, it would be considered a common gap and not likely to signify a change in trend. Or, if a trading range develops between 20 and 30, and a gap forms in the middle, it is probably a common gap.

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GAP – CONTINUATION (aka MEASURING GAP)

A continuation gap forms in the middle of a move and in the same direction as the current move. These gaps signal a continuation of the preceding trend and can mark good entry points. After a short or intermediate advance, a continuation up gap is usually considered bullish and signals a renewal of the uptrend. After a short or intermediate decline, a continuation down gap is usually considered bearish and signals a renewal of the downtrend. This gap is also called a MEASURING GAP.

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GAP - DOWN

A down gap forms when a security opens below the previous period's low, remains below the previous low for the entire period, and closes below it. Down gaps can form on daily, weekly or monthly charts and are generally considered bearish.

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GAP – EXHAUSTION

After an extended or long move, a gap in the direction of the current move is called an exhaustion gap. For an exhaustion gap to be considered valid, prices should reverse soon after the gap and close the gap. After an extended decline, a gap down could signal that the downtrend is about to exhaust itself. An exhaustion gap is confirmed when prices reverse soon afterward and move above the gap. The move above is called closing the gap. After an extended advance, an exhaustion gap would be confirmed when prices reverse soon afterward and move below the gap. Thus, an exhaustion gap appears near the end of a market move and signals a trend that is about to reverse.

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GAP – MEASURING - See GAP - CONTINUATION

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GAP – RUNAWAY

After a trend has been underway for some time, a gap will occur, usually occurs around the halfway mark of a move. There may be subsequent support or resistance.

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GAP – UP

An up gap forms when a security opens above the previous period's high, remains above the previous high for the entire period, and closes above it. Up gaps can form on daily, weekly or monthly charts and are generally considered bullish.

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GENERAL GAP - See GAP – GENERAL

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GOLDEN CROSS - See SMA(5/200)(Price)

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H

HEAD AND SHOULDERS PATTERN

This refers to a distinctive shape in a security's chart. There are two types of such patterns, both of which are reversal patterns: the head and shoulders bottom and the head and shoulders top.

The head and shoulders bottom is a reversal pattern marked by three (or more) prominent troughs, with a middle trough (the head) that is lower than two outside troughs (the shoulders). When the trendline (neckline) connecting the peaks at the top of the pattern is broken, the pattern is complete. The head and shoulder bottom is one of the most common and reliable reversal formations. You must remember that it occurs after a downtrend (which must be verified) and usually marks a major trend reversal when complete.

The head and shoulders top is a reversal pattern marked by three (or more) prominent peaks with a middle peak (the head) that is higher than the two outer peaks (the shoulders). When the trendline (neckline) connecting the troughs at the bottom of the pattern is broken, the pattern is complete. The head and shoulders top is one of the most common reversal formations. You must remember that it occurs after an uptrend (which must be verified) and usually marks a major trend reversal when complete.

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HLI - See Hollinger Liquidity Index

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HOLE-IN-THE-WALL

A hole-in-the wall is an abrupt down gap that comes immediately after a major rally.

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HOLLINGER LIQUIDITY INDEX (HLI)

A number used to measure liquidity using the most recent closing price and an average volume instead of volume only. HLI is a measure of money in motion, not just number of shares. We generally use 20-days for the average volume and consider 2,500,000 a reasonable liquidity floor. The higher the HLI the more liquidity is available.

HLI = Price(Closing)*SMA(20)(Volume)

So, all of the below would have an HLI of 2,500,000

The use of a single number allows cross-issue comparisons of liquidity. So AAA with a closing price of $10 and 300,000 average volume would be more or less liquid than BBB at $5 and 500,000? Comparing only volumes BBB would be more liquid. Comparing HLI AAA would be 3,000,000. BBB would be 2,500,000. So AAA would be more liquid when measured by HLI.

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I

ILLIQUID - See Liquidity

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INDEX

An index is a single issue that represents other issues, directly or indirectly. As an example, the Dow Jones Industrial Index represents the 30 issues that make up the index. However, if you total those 30 issues, the result will not equal the DJI, due to corrections for splits and other adjustments. Because of these corrections, DJI is an indirect representation.

The Philadelphia Semiconductor Index (SOXX) is the price-weighted representation of 18 U.S. semiconductor companies. It is not the same as the “semiconductor industry,” which includes more than 200 companies.

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INDICATOR - See Technical Analysis Indicator

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INDUSTRY

Organizations that primarily engaged in the same kind of economic activity are classified in the same industry, regardless of their form of organization (such as sole proprietorship, partnership, or corporation). The US Office of Management and Budget (OMB) classifies approximately 1,000 distinct activities as industries under the North American Industry Classification System (NAICS). NAICS replaced the Standard Industrial Classification system (SIC) in 2000. The 2002 NAICS is available on line at http://www.census.gov/epcd/naics02/naicod02.htm.

A company is usually in both an industry and a sector. For example, International Business Machines Corporation (IBM) is in both the Computer Hardware industry and the Technology sector. To find the sector and industry for a particular security, see Yahoo Finance. The link that follows is for IBM http://finance.yahoo.com/q/pr?s=IBM.

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ISLAND REVERSAL

The combination of an exhaustion gap followed by a breakaway gap in the direction of a new trend.

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ISSUE

The term “issue” can refer to a single equity issue (a stock), a single mutual fund, a single index, or a single sector. An “issue” is sometimes called a “security.”

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J

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K

KO - See KLINGER VOLUME OSCILLATOR below

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KVO - See KLINGER VOLUME OSCILLATOR below

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KLINGER VOLUME OSCILLATOR (KVO) or (KO)

The Klinger Oscillator is a volume- and price-based oscillator intended to measure both short- and long-term money flows into and out of a security. Klinger is sometimes misspelled as Klingler. More about this technical analysis indicator . . .

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