MailBag June 29, 2012 at 11:31 AM
Chartists can easily compare an indicator with the underlying security by placing the indicator directly behind the price plot. This can be done by choosing “behind price” as the “position” in the indicator setting. The example below shows the S&P 500 with gray bars and MACD (5,35,5) in red. The signal line for MACD is in blue. Note that I set MACD at (5,35,1) to remove the histogram and then added the 5-day EMA as a separate indicator of MACD. This technique can be used for all indicators, including RSI, the Stochastic Oscillator and CCI. Click on this image for a live chart. MACD Read More
MailBag June 22, 2012 at 09:30 AM
P&F charts are based purely on a price movement and do not take time into consideration. Even though the months and years are noted on the chart, the timescale at the bottom is totally dependent on the price changes. The red numbers and letters on the P&F chart mark the start of the month. Numbers 1 through 9 mark January through September, while A, B and C mark October, November and December. Click this image for a live version. The default settings for P&F charts often provide a long-term perspective (over one year). Users can change this perspective by reducing Read More
MailBag June 15, 2012 at 09:33 AM
There are a several tools available to analyze a sector. First and foremost, chartists can analyze the price chart for signs of an uptrend or downtrend. Second, chartists can create a Price Relative in the indicator window to gauge relative performance. This indicator is simply the sector price divided by the S&P 500 (or another benchmark). This ratio rises when the sector outperforms and falls when the sector underperforms. Third, chartists can use the exclusive StockCharts Technical Rank (SCTR), which measures relative strength. In general, SCTR scores above 50 show relative Read More
MailBag June 08, 2012 at 11:19 AM
The Zigzag (Retrace) indicator automatically calculates retracements and shows these numbers on the dotted lines connecting the highs or lows. The chart below shows the S&P 500 with the Zigzag (Retrace) indicator set at 10%. This means only moves of 10% or more are shown with the zigzag (pink). Price moves less than 10% are ignored. The zigzag uses the highs and lows with candlestick and bar charts, but closing prices with a close only chart. A dotted line connecting two highs shows the retracement of the prior decline. A dotted line connecting two lows shows the retracement of the Read More
