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TASUG Meeting – November/2003
Using its tools to spot
Chart Patterns, Candle Patterns,
Ratios, and Divergences.
Andy Nogueira
Part I - Stockcharts Tools
Breadth Charts
Market Carpet
PerfCharts
SharpCharts
StockScans
Home Page
Part II – Using Stockcharts to spot
Candlestick Patterns
• Bullish / Bearish
Divergences
• Positive / Negative
Chart Patterns
•
Reversal / Continuation
Ratios
•
Intermarket Analysis
Breadth Charts
Shows Market Breadth for
• NYSE
• Advancing / Declining
• Highs / Lows
• NASDAQ
• Advancing / Declining
• Highs / Lows
• AMEX
• Advancing / Declining
• Highs / Lows
Page 1
Page 2
Market Carpet
Lets you see at a glance
what the entire market is
doing as well as the sectors
and companies within the
market.
Available Predefined Carpets
•
•
•
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S&P Sector Carpet
Market Summary Carpet
Fidelity Fund Carpet
Rydex Fund Carpet
Toronto Stock Exchange
Perfcharts Carpet
Lets you compare two or
more different stocks,
indices, or mutual funds
during a period of time.
Display price performance
lines for up to 10 different
financial datasets
Line Graph or Histogram
(Total Return)
Line Graph
Histogram
Sharpcharts
Create bar charts, line charts
and candlestick charts for more
than 20,000 stocks, indices,
and mutual funds.
Intraday, daily, weekly and
monthly charts in a variety of
sizes and color schemes
Create lists of annotated charts
Annotated Charts
Stock Scans
Page
Create your own scans to
find stocks in the database
that meet certain technical
conditions and criteria
Predefined Scans:
•
Technical Indicators
•
Candlestick Patterns
•
P&F Alerts
Candlestick Patterns
Bullish Patterns
•
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Morning Star
Bullish Abandon Baby
Bullish Engulfing
Bearish Patterns
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Evening Star
Dark Cloud Cover
Candlestick Formation
UP
DOWN
Morning Star
•
A downtrend is under way
• First day is a long black day
• Second day gaps below the
1st day's close
• Third day is a long white day.
Morning Star
Bullish Abandon Baby
• A downtrend is under way
• First day is a black day.
• Second day is a doji
whose shadows gaps
below the 1st day's close.
• Third day is a white day
with no overlapping
shadows.
Bullish Abandon Baby
Bullish Engulfing
• The color of the first day's
body reflects the trend.
• The second real body should
have the opposite color of the
first real body.
• The second day's real body
totally engulfs the first day's
body.
Bullish Engulfing
Evening Star (Bearish)
• First day is a long white day.
• Second day gaps above the
first day's close.
• Third day is a long black day.
Evening Star (Bearish)
Dark Cloud Cover (Bearish)
• First day is a long white day
• Second day is black with an
open above the high of the
previous day
• Second day closes within but
below the midpoint of the first
day’s body
Dark Cloud Cover (Bearish)
Divergences
A divergence occurs when the trend of a
security's price doesn't agree with the trend
of an indicator.
•
Positive Divergence
•
•
Occurs when the indicator
moves higher at the same time
the stock price is declining.
Negative divergence
•
Occurs when the indicator
moves lower as the stock price
continues to rise.
Chart Patterns
Reversal Patterns
• Head and Shoulders
• Double Top (Bottom)
Continuation Patterns
•
Flag
Head & Shoulders
Consists of a peak followed
by a higher peak and then a
lower peak with a break below
the neckline.
Volume Confirmation
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First peak - High volume
Middle peak - Moderate
volume
Third peak - Low
volume
A sharp increase in
volume on the break
below the neckline
Double Top
• Made up of two consecutive
Double Top
peaks that are roughly equal,
with a moderate trough in
between
• Volume contracts on second
peak as a further indication of
weakening demand.
• Support must be broken in a
convincing manner, and
usually with an expansion of
volume
Flags (Continuation)
• Mark a small consolidation
before the previous move
resumes.
• Volume confirmation:
• Expands to form the flagpole
• Contracts during the flag's
formation
• Expands after the resistance
breakout.
• Usually the price target is
the length of the flagpole
Ratios
Intermarket Analysis
•
Intermarket Technical Analysis is the
study of the relationships between the
four major financial markets: Stocks,
Bonds, Commodities and Currencies.
•
30 Year US Bond / S&P 500
US$ Dollar / Gold
•
Links and Suggested Reading
Links
• Stockcharts.com
• Prophet.net
• Hotcandlestick.com
• Equis.com
• Leavittbrothers.com
• Chartpatterns.com
Suggested Reading
• Japanese Candlestick Charting Techniques - Steven Nison
• Beyond Candlesticks - Steven Nison
• Technical Analysis of Stock Trends - Robert Edwards & John Magee
• Encyclopedia of Chart Patterns - Thomas N. Bulkowski
Andy Nogueira – [email protected]