Appendix: Chart interpretations

Figure A4.23: Lihir Gold (LHG) 6-month OHLC chart

Source: www.CommSec.com.au

I see this chart as a slight downtrend, followed by a break out to a slight uptrend. This uptrend could also have been interpreted as a double bottom. Then there’s a big gap due to a takeover offer which took the price to a new high, after which a series of channels formed. I’ve also shown with dashed lines what you might interpret as inclined double bottoms and tops.

Figure A4.24: OZ Minerals (OZL) 6-month OHLC chart

Source: www.CommSec.com.au

I interpret this chart as a series of channels with a break out from each channel to the next. On close examination you’ll notice that this chart contains a number of small gaps that don’t seem to be particularly significant. There are also examples of wave action in each of the channels.