ModE98
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Post by ModE98 on Jan 22, 2013 12:34:57 GMT -5
Creating a new thread for discussion (pro/con and/or general commentary re: charts and charting, since there has not been such a thread on the board. It seems some investors like them as a "tool" in their stock analysis, while others shun them as utterly useless. Believe there can be a good exchange of thoughs and opinions on the subject which may be of interest to members. So, will give it a try. This is an "open" thread for all whom may wish to comment.
To open the commentary, I have used charts/charting for many years (since mid-80s) on my computers. I find usefulness in charts as a visual history of a selected stock. Obviously, charts cannot predict an accurate future. One can use trend lines to attempt to "devine" a continued uptrend or a coming correction in price, and with good luck will guess correctly. There are far too many "if, and's, and but's" entering the picture; so, at least, "predicting" is virtually of no genuine practical use that I can see.
Believe charts have their place as merely one tool in a set (including fundamental analysis, interest trends, world events, state of the economy, etc., etc.).
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2kids10horses
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Post by 2kids10horses on Jan 22, 2013 13:20:57 GMT -5
Mod,
I think there is a lot to be said for Technical Analysis. Simple concepts such as trend lines, trading channels, support and resistance are easily understood once you look at the charts.
There are some who say that TA is meaningless drivel because the value of a stock (and thus the price) is driven by the underlying fundamentals. There is certainly some truth to that. But also, the price is set by the "market". If the "market" thinks the price is going to be going up, the stock will get bought, regardless of the fundamentals.
Also, support and resistance levels are real. Whereas the "stock" doesn't remember any past prices, the people who own the stock certainly do. A stock broker told me a story back in the mid 1990s of a little old lady who came into his office and demanded that he sell all her Coca-Cola stock. This was when it was going gangbusters, growing 20% per year. He asked why? She said that she'd owned Coke for 20 years, and it had been a loser for her over those 20 years, and now, she could get back even. He didn't think that was possible! Everyone was making money in Coke. He looked at the chart, and sure enough, she was right. She had been underwater for 20 years!
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The Virginian
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Post by The Virginian on Jan 22, 2013 15:03:47 GMT -5
I don't use them either - Not saying they don't work - just that it really doesn't fit with my style of investing. I'm sure they are a great tool for Day Traders or Timing the Markets , neither of which I do as a method of investing. I sure don't mind reading and learning about them though.
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ModE98
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Post by ModE98 on Jan 22, 2013 15:19:06 GMT -5
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tyfighter3
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Post by tyfighter3 on Jan 22, 2013 18:38:17 GMT -5
I do look at charts and they so work if you know what you are looking at and what they are saying to you. i look for M and W formations ( double top and bottom) Spikes up and down will tell you if a top or bottom are coming. Support and Resistance levels and how strong they are will help you to put in positions or exit one. Volume will help you know if support or resistance has been broken. Cup and handle formations are good to look for to help you out. Charts takes the emotions out of trading and helps you from losing too much of your hard earned money in the process. The first hour of trading usally shows you the trading range a stock will trade in the day. A lot of things can help you long term even with Charts.
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2kids10horses
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Post by 2kids10horses on Jan 22, 2013 20:50:39 GMT -5
I like looking at chart using Candlesticks for the price action. Certain patterns usually can give an indication of what's to come. For example, a "hammer" pattern at the bottom of a decline usually signals the decline is over. (It's the reverse of a "blow off top".) That's usually a good time to initiate a long position.
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ModE98
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Post by ModE98 on Jan 23, 2013 16:35:41 GMT -5
Have used candlesticks and I need to study up more on application to get better at it. Use mostly H/L/C for now, plus volume at bottom of chart. Suppose charting is of minor value to me now that I am only accumulating high yield business finance types and REITs in port due to the vulgarities of "Methusala" type aging. Creak, crack, moan, and shuffle along to get anywhere.
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tyfighter3
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Post by tyfighter3 on Jan 23, 2013 16:54:02 GMT -5
Mod, you need to get a good Massauge to get out those Creaks and Cracks but I don't think it would cure your moaning, LOL
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Virgil Showlion
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Post by Virgil Showlion on Jan 23, 2013 17:06:42 GMT -5
At rovo's request, I'd installed [chart][/chart] tags on the v4.5 IBB board so that people could post Bloomberg charts (anything with a stock ticker) by putting e.g. [chart]AAPL[/chart] into a post.
I left it to rovo to announce the feature and I'm not sure he did.
At any rate, if people are interested, I can certainly include the same feature in v5. Would any of you have use for this kind of feature? I'd also add it as a 'chart' button on the WYSIWYG editor.
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clarkrl2
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Post by clarkrl2 on Jan 23, 2013 19:39:01 GMT -5
Virgil Selullar, thank you for the time you put into making the boards more functional and user friendly. I think the chart feature would be good. Bloomberg charts would be ok but I think Stockcharts has more technical features available. Whatever others think would be fine with me regarding which charts to use.
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Virgil Showlion
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Post by Virgil Showlion on Jan 23, 2013 19:47:39 GMT -5
I'll have to look into Stockchart's embedding options. I'll let you know if/when the feature is available. I've got a hefty to-do list before then.
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clarkrl2
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Post by clarkrl2 on Jan 27, 2013 14:15:05 GMT -5
One charting signal I've been using for Pick of the Week is a very short term signal you can find at www.stockcharts.com It is the Elder Impulse System. To find it go to the attribute and change from Candlesticks to Elder Impulse System. I prefer the weekly setting. I also like to select the 13-period EMA. If the bar is green it is bullish (both MACD divergence and the 13-period EMA are increasing), if the bar is blue it is nuetral (one increasing and the other decreasing), and if the bar is red (both signals are decreasing). Here is a link to the charts page. stockcharts.com/h-sc/uiFor my pick this week RAD the weekly chart has a green bar but the daily chart is blue because while the slope of the 13-period EMA is positive the divergence of the MACD is decreasing. I am not a technical trader but I do like to study TA. Use this or any other method at your own risk but this is one I think has some merit.
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ModE98
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Post by ModE98 on Jan 27, 2013 21:07:31 GMT -5
Right now am using a 15-50-200 day pattern on a 2 year chart. When the 15 crosses the 200 it MAY signal a positive trend developing. If and when the slower 50 crosses the 200 in sequence it confirms the trend and the stock becomes one of interest. Still need to look carefully at other data for support, as conditions can change and false chart signals are well known to occur.
My Scottrade Elite program has a wide range of data/info. I make full page charts for clarity and some smaller charts on other data pages as mini indicators. A full range of charts can be made for daily intervals from a 1 second daily, up to 60 minutes for 20 weeks for more recent action. Others can be made on a monthly or yearly daily basis. Still others can be made for a weekly or monthly basis for up to 24 years. And one can set lines for a wide variety of days to experiment with varous line patterns and develop one's own custom set up. The old 200/50/(10/15/or 20) lines (as preferred) seem fairly standard.
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2kids10horses
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Post by 2kids10horses on Feb 28, 2013 20:57:19 GMT -5
Looking at a one year chart of QQQ, it appears to be drawing a rising shoulder "Head and Shoulder" pattern. The head being at 70 and the two shoulders being at 68.
It will be interesting to see if it plays out.
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ModE98
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Post by ModE98 on Mar 1, 2013 9:33:46 GMT -5
That is an interesting pattern formation. Yes, the next few weeks will tell a tale.
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uncle23
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Post by uncle23 on Mar 11, 2013 19:28:38 GMT -5
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clarkrl2
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Post by clarkrl2 on Apr 17, 2013 14:54:18 GMT -5
If you click this link it will take you to the stockcharts website with the settings for a weekly chart of MDY (etf that tracks the S&P 400 midcap index). The chart shows the Elder Bars which turn red when the 13-week ema and the weekly MACD are both negative. This is the first since Nov. 2012. This shows a possible turn in the intermediate term from bullish to bearish. QQQ, DIA, and SPY still had blue bars when I checked. I have some short term trades open in PDLI and HCI. I will be watching these very closely.
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clarkrl2
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Post by clarkrl2 on Apr 17, 2013 15:47:45 GMT -5
By market close the Elder Bar had turned back to blue. I will continue to moniter this signal.
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clarkrl2
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Post by clarkrl2 on Apr 18, 2013 23:06:07 GMT -5
The elder bar for MDY, the russel 2000, and qqq are now red. I bought some SRTY at $26.50.
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ModE98
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Post by ModE98 on Apr 19, 2013 8:28:33 GMT -5
Not good signs for the markets for the time being. We'll soon see how things will play out....just a blip, a bump, or a big pothole. Your short could become a good strategic move clarkrl2. Not a bad bet, as things appear on the charts.
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clarkrl2
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Post by clarkrl2 on May 3, 2013 14:00:42 GMT -5
I sold SRTY because the Elder Impulse bar has changed back to green. This was a 17.2% loss before commissions.
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ModE98
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Post by ModE98 on May 3, 2013 15:23:15 GMT -5
This market seems quite tricky to navigate. What looks good one day turns sour quite quickly as the market grinds on in the stealthy advance so many people find hard to believe. Yet, the tide is in for now, when we get the ebb tide is anyone's guess, unless one goes by the moon phases.
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clarkrl2
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Post by clarkrl2 on Jul 7, 2013 6:21:54 GMT -5
The week chart for SPY is showing a green elder impulse bar. There had been a red bar two weeks ago. I think the weekly charts for SPY, QQQ, DIA, and MDY show the upward trend is still in place.
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clarkrl2
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Post by clarkrl2 on Jul 23, 2013 10:27:07 GMT -5
The chart for the SPY etf still looks good except the daily and weekly charts are showing an RSI that is becoming overbought. weekly chartThere appears to be support at 155 on the weekly chart. Personally I believe valuations are getting pretty high for some stocks but until the charts break down let the good times roll.
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clarkrl2
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Post by clarkrl2 on Aug 19, 2013 15:54:15 GMT -5
This chart is not looking good SPYThis one is worse DIANotice on the chart for DIA for the RSI above the chart a lower high was followed by a lower low. This is still not a bearish chart but it looks like the June low could be taken out. If that is followed by a lower high that would be very bearish to me.
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ModE98
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Post by ModE98 on Aug 19, 2013 17:37:51 GMT -5
This is entering the September/October period where almost anything can occur. After the nice uptrend we have had in the last few years, it may indicate time for some backing and filling is coming due. For some reason, do not think a BIG correction is upon us. But only time will tell if the good times are over for now and for how long.
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The Virginian
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Post by The Virginian on Aug 20, 2013 17:16:53 GMT -5
I don't see how it can possibly be over - People have to put their money somewhere - Bonds are not safe - Banks pay nothing - China is shakey at best - Europe isn't much better ( watch out after the German elections) and the Emerging markets are getting hammered - So that leaves good ole US Stocks ! After a short pullback while people figure it all out they will return and drive the market above 16,000 ! (Sounds good , doesn't it? Actually I don't have a real clue but I suspect this is what might happen) Only Time will tell -
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clarkrl2
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Post by clarkrl2 on Aug 20, 2013 22:52:51 GMT -5
The argument has been to buy the quality large caps with high yields but with 10-yr treasury yields approaching 3% it will get harder to make that thesis hold water. In my opinion those stocks with high PEs and low growth rates that have been bought by those seeking yield will suffer the most. Those Dow Industrials with Long term PEG values more than 2 are MRK, XOM, CVX, PFE, JNJ, KO, BAC, and T. Only two have a PEG less than 1 IBM and INTC.
I am not a chartist but I believe the rotation out of the large cap quality stocks has begun. Eventually that trade will wear out and either the earnings will have to catch up with the price or the price will come down to the earnings.
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2kids10horses
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Post by 2kids10horses on Aug 22, 2013 6:21:52 GMT -5
Hmmm...
The markets are getting choppy recently. That usually indicates a change in trend.
The question is: Which trend?
The markets are up in the long term. For the past couple years.
The markets are down/sideways in the shorter term of the past month or so.
So, which is it?
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ModE98
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Post by ModE98 on Aug 23, 2013 17:43:45 GMT -5
May be a moderate interim change for perhaps a month to 7 weeks. Do not see a major correction in the works as yet. Perhaps up to a 15%-18% temporary mini-correction indicated. The late August, September, October period can be tricky. That said, of course, only time will tell.
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