Technical Analysis Methodology

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 after the US market close at 6:00 PM Eastern Time. Daily charts update every trading day, weekly charts update on Fridays, and monthly charts update on the last trading day of each month. 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:

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 pipeline runs every trading day (Mon–Fri) at 6:00 PM ET:

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

Daily charts are regenerated every run. Weekly charts are added on Fridays. Monthly charts are added on the last trading day of each month. 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.