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Technical Analysis Methodology

How FolioCharts uses multi-layer AI agents to produce consistent, unbiased technical analysis for every ticker, every day.

Overview

FolioCharts is a free, AI-powered technical analysis platform that publishes daily, weekly, and monthly chart analysis for stocks and cryptocurrencies. Every chart on this site is generated and analysed by the same multi-layer AI agent system used by the Foliotrail portfolio management platform.

The system processes OHLCV (Open, High, Low, Close, Volume) market data from TwelveData through three analysis layers, producing a structured output that includes market state classification, probability-weighted scenarios with price targets, and actionable position sizing levels.

Data Sources

All market data is sourced from TwelveData, a professional financial data provider. The pipeline fetches:

  • OHLCV candlestick data across daily, weekly, and monthly timeframes
  • Simple Moving Averages (SMA) — 50, 100, and 200 period
  • Exponential Moving Averages (EMA) — 50, 100, and 200 period
  • Relative Strength Index (RSI) — 14 period

Data is refreshed daily after the US market close (4:00 PM Eastern Time). All timestamps are shown on each chart page.

Layer 1 — State Detection

The first analysis layer classifies each ticker into one of nine price action states:

uptrend Price above key MAs, bullish momentum
downtrend Price below key MAs, bearish momentum
parabolic Extreme upside acceleration
falling knife Rapid price decline
bottoming attempt Testing support after decline
stabilized base Consolidation after decline
breakout reversal Transitioning bearish to bullish
choppy range No clear directional trend
volatility expansion Significant increase in price swings

Each state classification includes a confidence percentage, key triggers that led to the classification, and both confirmation and invalidation criteria.

Layer 2 — Scenario Engine

The second layer generates two probability-weighted scenarios for each chart:

  • Scenario 1 (Most Likely) — The primary expected outcome based on current price action, with two price targets and a revert level
  • Scenario 2 (Alternative) — A secondary scenario that would unfold if the primary thesis is invalidated

Scenarios are generated using support/resistance mapping, Elliott Wave Theory principles, and volume profile analysis. Each scenario includes specific price targets and the conditions that would confirm or invalidate it.

Layer 3 — Position Sizing

The third layer translates analysis into actionable levels:

  • Start Position — Initial entry zone based on the current price action state
  • Add Zone — Additional accumulation if price pulls back to support
  • Heavy Add — High-conviction zone for maximum position building
  • Derisk Levels — Trim zones as price reaches resistance targets
  • Close Position — Full exit zone

This framework mirrors the approach used by institutional portfolio managers, providing a structured risk management overlay on top of the technical analysis.

Timeframes

Every ticker is analysed independently across three timeframes:

  • Daily — Short-term trend and momentum, ideal for swing trading
  • Weekly — Medium-term trend, useful for position sizing decisions
  • Monthly — Long-term structural trend, best for portfolio allocation

Each timeframe is analysed independently — the daily analysis does not influence the weekly, and vice versa. This allows investors to compare signals across timeframes and make more informed decisions.

Update Schedule

The full pipeline runs daily after the US market close:

  1. Fresh OHLCV data and indicators are fetched from TwelveData
  2. Charts are generated with annotated moving averages and RSI
  3. AI agents analyse each chart image independently
  4. The static site is rebuilt and deployed

All analysis timestamps are displayed on each chart page so you can verify when the data was last refreshed.

Limitations

FolioCharts is a technical analysis tool. It does not consider:

  • Fundamental analysis (earnings, revenue, valuation ratios)
  • News events, earnings announcements, or macroeconomic data
  • Options flow, dark pool activity, or institutional positioning
  • Sector rotation or correlation analysis

Technical analysis is one input among many for investment decisions. Always conduct your own research and consider consulting a qualified financial advisor. See our full disclaimer.

Frequently Asked Questions

How does FolioCharts generate technical analysis?

FolioCharts uses a multi-layer AI agent system that processes OHLCV market data through three stages: state detection (trend classification using moving averages, EMA crossovers, and RSI), scenario generation (probability-weighted price targets using support/resistance mapping), and position sizing (actionable entry/exit levels). Charts are updated daily after market close.

What technical indicators does FolioCharts use?

FolioCharts analyses charts using Simple Moving Averages (SMA 50, 100, 200), Exponential Moving Averages (EMA 50, 100, 200), Relative Strength Index (RSI 14), EMA crossovers, volume profile, and candlestick patterns.

What are the price action states?

FolioCharts classifies each ticker into one of nine states: Uptrend, Downtrend, Parabolic, Falling Knife, Bottoming Attempt, Stabilized Base, Breakout Reversal, Choppy Range, and Volatility Expansion. Each state has specific criteria based on moving average alignment, RSI levels, and price momentum.

Where does FolioCharts get its market data?

All market data is sourced from TwelveData, a professional financial data provider. Data includes OHLCV candlesticks and pre-calculated technical indicators, refreshed daily after the US market close (4:00 PM Eastern Time).

Is FolioCharts financial advice?

No. FolioCharts is an educational tool that provides AI-generated technical analysis. It does not constitute financial advice. Always conduct your own research and consult a qualified financial advisor before making investment decisions. See our full disclaimer.