How Can I Compare Several Symbols on One SharpChart? (w/video)

Chartists can show the performance for several symbols on one SharpChart by entering a comma-separated list (spy,xly,xlk,xli,xlf). Note that free users can chart up to five symbols on one chart, Basic and Extra members can chart up to six symbols and Pro members can chart up to ten symbols. Click here to see the different subscription packages.  

Simply enter these symbols in the symbol entry box and click go to create a performance SharpChart. The example below shows the performance for SPY and four sector SPDRs over the last six months. All five are up, but one is clearly up more than the others. The Consumer Discretionary SPDR (pink) is up over 13% and the clear leader. The Finance SPDR (XLF) is up less than 5% and the clear laggard. SPY is up around 6.5%. 

Chartists can also create a relative performance chart by checking the box at the top left to set the first symbol as the benchmark. In this example, SPY is the benchmark and the chart shows relative performance for the four SPDRs. Relative performance is simply the change in the SPDR less the change in SPY. Relative performance is positive when the SPDR is up more than SPY (relative strength). Relative performance is negative when the SPDR is up less than SPY (relative weakness). In this example, XLY shows the most relative strength and XLF shows relative weakness.  

What is the Sector Summary and How Can I Use it? (w/video)

The Sector Summary page is designed to help chartists find the best performing sectors, industry groups and stocks. Using a top-down approach, users start with the sectors to see a break down of the broader market. Click on a sector to see the industry groups in that sector and click on the industry group to see the stocks in that group. Chartists can also adjust the timeframe, sort the various columns, apply PerfCharts, use MarketCarpets and use some symbol groups in a Relative Rotation Graph (RRG). 

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How Can I Get Intraday Updates for the McClellan Oscillator? (w/video)

There is a little indicator "hack" that chartists can use to update the McClellan Oscillator during the day. First, note that StockCharts has end-of-day (EOD) symbols for the McClellan Oscillators. Simply search for the term "mcclellan" in the symbol catalog. The symbols beginning with an exclamation point (!) come from the DecisionPoint merger and these indicators are also updated after the close. The ratio-adjusted McClellan Oscillator uses the ratio of net advances [(advances less declines) divided by total issues]. The traditional McClellan Oscillator simply uses net advances (advances less declines). 

This hack works for the Nasdaq and NYSE McClellan Oscillator because StockCharts has intraday data for Nasdaq Net Advances ($NAAD) and NYSE Net Advances ($NYAD). First, create a chart for NYSE Net Advances ($NYAD), which is the base indicator for the NYSE McClellan Oscillator. Note that I made this base indicator invisible in the main chart window and added the 19-day EMA and 39-day EMA because the McClellan Oscillator is the difference between these two EMAs. For reference, I also added $NYAD as an indicator in histogram format below the main window and the NY Composite Index for reference. 

Click this image for a live chart

Chartists can now create the McClellan Oscillator by adding MACD(19,39,1) as an indicator. This will plot the difference between the 19-day EMA of $NYAD and the 39-day EMA of $NYAD. For reference, I also added the NY McClellan Oscillator ($NYMOT) in the lower indicator window. The values are not exact, but they are very close and the line shapes are exactly the same. More importantly, the MACD version is updated during the day and the crosses above/below the zero line are the same for both indicators. 

How can OBV and the Accumulation-Distribution Line be so Different? (w/video)

It does not always happen, but sometimes On Balance Volume (OBV) and the Accumulation Distribution Line (ACDL) diverge to paint completely different pictures. These two can diverge because they are calculated differently. First, note that both indicators use price and volume to detect accumulation and distribution. OBV, which was developed by Joe Granville, rises when the close is higher than the prior close and declines when the close is lower. On a daily chart, the period's volume is added on an up day and subtracted on a down day. Down days on big volume, therefore, will push the indicator lower. 

The Accumulation Distribution Line (ACDL), which was developed by Marc Chaikin, measures the level of the close relative to the high-low range for the period. A close above the mid point of the high-low range indicates accumulation and the volume multiplier is then positive. A close below the midpoint indicates distribution and the volume multiplier is then negative. A stock, therefore, can close below the prior close and still have positive accumulation for the Accumulation Distribution Line. 

Click this image for a live chart

The chart above shows Chevron (CVX) with the Accumulation Distribution Line (blue) rising from mid December and On Balance Volume (OBV) falling during this same timeframe. The red price bars and red volume bars show when the stock closed lower. These high volume declines pushed OBV lower. The green ovals on the price chart show two examples when prices closed lower, but the close was near the high of the day. This means the volume multiplier for the Accumulation Distribution Line was positive and these high volume bars pushed the indicator higher.  You can read more about these indicators in our ChartSchool.

How Can I Find and Chart International Bond Yields?

StockCharts users can do a simple database search to find symbols for 10-year government bond yields for the United States, Germany, Japan and the UK. Go to the symbol catalog and enter "yield and 10" (without quotation marks). The "and" means that both words are required in the results. Users could also search for "yield and indx" to see all of our index symbols related to yields. The term "indx" insures that an index symbol will show up in the results. 

Chartists can plot these yields on the same chart using the "price - same scale" overlay. The chart below shows a scale ranging from .20% to 3.2%.  German and Japanese 10-yr yields are near the bottom. US and UK 10-yr yields are just above the mid point. The US 10-year yield is the highest of the group. The Japanese and German 10-year yields are duking it out for the lowest. 

Click this image for a live chart

What Is an Island Reversal? (w/video)

An island reversal is a reversal pattern that forms with two gaps and price action in between the two gaps. These gaps tell us that the island reversal marks a sudden, and sharp, shift in direction. Even though they are relatively uncommon, island reversals are potent patterns that warrant our attention. 

The alignment of the gaps holds the key. First, note that a bullish island reversal forms with a gap down and then a gap up. A bearish island reversal forms with a gap up and then a gap down. These gaps overlap to create an island of price action, hence the term "island reversal". The island is above the gaps on a bullish island reversal, and below the gaps on a bearish island reversal. 

The first example shows Chipotle Mexican Grill (CMG) with bearish island reversal. Note the gap up in early January, the consolidation into early February and the gap down in early February. Prices gapped above 696, held above 696 and then gapped below 696 to create the island. Traders establishing long positions on the island are now trapped with losses. 

The second example shows Raytheon (RTN) with a bullish island reversal. There is a gap below 104, a three day stall and then a gap above 104. There were no trades at 104 because of the gaps. Thus, traders establishing short positions on the island are now trapped with losses. 

Which Oscillators are Good for Overbought and Oversold Indications? (w/video)

In general, momentum oscillators with a fixed range are best suited for identifying overbought and oversold conditions. These include RSI, the Stochastic Oscillator and StochRSI. RSI and the Stochastic Oscillator fluctuate between zero and one hundred, while StochRSI fluctuates between zero and one. Momentum oscillators like MACD and the Percentage Price Oscillator (PPO) do not have fixed ranges and this makes it more difficult to identify overbought and oversold conditions. 

The QQQ chart below shows RSI(10), the Slow  Stochastic Oscillator (14), StochRSI(14) and MACD, which is just shown for reference. First, notice that RSI is the least sensitive of the three fixed-range oscillators because there were only two oversold readings in seven months. I even shortened the look-back period from 14 to 10 in order to increase sensitivity. Second, notice that an oscillator can become overbought and remain overbought in a strong uptrend. The Stochastic Oscillator moved above 80 on October 24th and remained above 80 until December 3rd. Third, notice that StochRSI is by far the most sensitive of the three. This is because StochRSI is an indicator of an indicator. 14-period StockRSI is the 14-period Stochastic Oscillator applied to 14-period RSI, which means it is measuring the momentum of momentum.  

There are two things chartists should keep in mind. First, look for oversold readings when the bigger trend is up and overbought readings when the bigger trend is down. An oversold reading in an uptrend signals a pullback. Second, set a trigger to signal an end to overbought or oversold conditions. Each oscillator has a centerline that can be used for such a signal. For example, a move below .20 triggers an oversold condition in StochRSI. This condition ends when StochRSI surges above .50, which puts it in the upper half of its fixed range. 

How Can I Highlight a Shape to Draw a Support-Resistance Zone? (w/video)

Once a shape is drawn on a SharpChart, chartists can use the "fill mode" and "opacity" settings to highlight the shape. This is a great way to draw support or resistance zones on charts, or to highlight a consolidation. Here are the steps:

1.    Create a SharpChart and open the ChartNotes workbench to annotate. 
2.    Select a shape from the icon row at the top left. 
3.    Move to your starting point and click-drag to draw shape. 
4.    Now use the tools on the vertical icon bar on the left. 
5.    Choose the color with the top icon.
6.    Choose fill mode with the second icon from the top (hollow, shaded or solid).
7.    Choose opacity with the third icon from the top and use slider.
8.    Choose line thickness by clicking the icon with short horizontal line.

If you need to activate the shape for editing, click the "select" icon in the upper left corner and then click the shape to activate it. The shape is selected when the yellow handles appear on corners.

The example shows three different shape possibilities. The first is a red shaded box and the vertical icons are shown as they appear with this setting. Notice that the fill icon is red to denote the "shaded". The green box is solid and the fill icon shows a red-blue X. The oval shape is hollow and the fill icon shows a diagonal red line. 

How Can I Shift Moving Averages Forwards and Backwards? (w/video)

Shifting a moving average is not as crazy as it may seem. First, chartists may want to compare the current day's price against the prior day's moving average value. To do this, one needs to shift the moving average forward one period. Second, a 50-day moving average is the average of the last fifty days and some chartists like to show this value in the middle of that 50-day period. This is also known as a centered moving average. 

Chartists can shift (displace) a moving average forwards or backwards by adding a comma and number to the parameters. Adding a comma and a number to a 50-day moving average (50,25) would shift it forward 25 periods, which would put it in the future. A moving average can be shifted back by preceding the number with a minus sign (50,-25). This would shift a moving average back 25 periods, which would put it in the middle of the lookback period (50 days). The chart above shows a normal 50-day SMA in blue, a forward-shifted moving average in red and a centered moving average in green. 

SharpCharts users can also shift indicators that use moving averages. These include Bollinger Bands, Keltner Channels, SMA Envelopes and Price Channels. The example above shows SMA Envelopes shifted forward one period (10,1,1). The extra 1 at the end is the shifting parameter. This lines up the current price bar with yesterday's indicator value. This is helpful if you want to know when today's price action is enough to break above or below the prior day's indicator value. 

How Can I Make Bollinger Bands and Envelopes Stand Out?

Bollinger Bands and Moving Average envelopes are indicators with two outer lines based on a moving average. Chartists can view these indicators as just lines or really make them stand out by setting the "Style" as "Area". This setting essentially shades the area between the outer lines and colors the indicator, which makes it really easy to see Bollinger Band contractions or breakouts. 

The example above shows Cognizant Technology (CTSH) with Bollinger Bands in pink. In addition, the opacity is set at .30 to make them a little more transparent (and less pink). Notice how easy it is to spot the Bollinger Band expansions and contractions. The Bollinger Bands contracted from early September to mid October as the stock edged lower (from 46.5 to 43). The rally started when CTSH broke above the upper Bollinger Band and resistance on October 27-28.

The chart above shows Automatic Data Processing (ADP) with moving average envelopes (20,2.5). These are 2.5% bands above and below a 20-period simple moving average. Notice how ADP held the lower envelope in October (on a closing basis), and then broke out the third week of October. The lower envelope is now acting as support (on a closing basis).