Using its tools to spot Chart Patterns, Candle Patterns, Ratios, and Divergences. TASUG Meeting – November/2003 Andy Nogueira

Breadth Charts Breadth Charts Market Carpet Market Carpet PerfCharts PerfCharts SharpCharts SharpCharts StockScans StockScans Home Page Part I - Stockcharts Tools

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 NYSE Advancing / Declining Advancing / Declining Highs / Lows Highs / Lows NASDAQ NASDAQ Advancing / Declining Advancing / Declining Highs / Lows Highs / Lows AMEX AMEX Advancing / Declining Advancing / Declining Highs / Lows Highs / Lows Page 1Page 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. 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 Available Predefined Carpets S&P Sector Carpet S&P Sector Carpet Market Summary Carpet Market Summary Carpet Fidelity Fund Carpet Fidelity Fund Carpet Rydex Fund Carpet Rydex Fund Carpet Toronto Stock Exchange Toronto Stock Exchange

Perfcharts Carpet Lets you compare two or more different stocks, indices, or mutual funds during a period of time. 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 Display price performance lines for up to 10 different financial datasets Line Graph or Histogram (Total Return) 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. 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 Intraday, daily, weekly and monthly charts in a variety of sizes and color schemes Create lists of annotated charts Create lists of annotated charts

Annotated Charts

Stock Scans Create your own scans to find stocks in the database that meet certain technical conditions and criteria Create your own scans to find stocks in the database that meet certain technical conditions and criteria Predefined Scans: Predefined Scans: Technical Indicators Technical Indicators Candlestick Patterns Candlestick Patterns P&F Alerts P&F Alerts Page

Candlestick Patterns Bullish Patterns Bullish Patterns Morning Star Morning Star Bullish Abandon Baby Bullish Abandon Baby Bullish Engulfing Bullish Engulfing Bearish Patterns Bearish Patterns Evening Star Evening Star Dark Cloud Cover Dark Cloud Cover

Candlestick Formation DOWNUP

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

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

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

First day is a long white day. First day is a long white day. Second day gaps above the first day's close. Second day gaps above the first day's close. Third day is a long black day. Third day is a long black day. Evening Star (Bearish)

First day is a long white day First day is a long white day Second day is black with an open above the high of the previous 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 Second day closes within but below the midpoint of the first day’s body Dark Cloud Cover (Bearish)

Divergences Positive Divergence Positive Divergence Occurs when the indicator moves higher at the same time the stock price is declining. Occurs when the indicator moves higher at the same time the stock price is declining. Negative divergence Negative divergence Occurs when the indicator moves lower as the stock price continues to rise. Occurs when the indicator moves lower as the stock price continues to rise. A divergence occurs when the trend of a security's price doesn't agree with the trend of an indicator.

Chart Patterns Reversal Patterns Reversal Patterns Head and Shoulders Head and Shoulders Double Top (Bottom) Double Top (Bottom) Continuation Patterns Continuation Patterns Flag Flag

Head & Shoulders Consists of a peak followed by a higher peak and then a lower peak with a break below the neckline. Consists of a peak followed by a higher peak and then a lower peak with a break below the neckline. Volume Confirmation Volume Confirmation First peak - High volume First peak - High volume Middle peak - Moderate volume Middle peak - Moderate volume Third peak - Low volume Third peak - Low volume A sharp increase in volume on the break below the neckline A sharp increase in volume on the break below the neckline

Double Top Made up of two consecutive peaks that are roughly equal, with a moderate trough in between Made up of two consecutive peaks that are roughly equal, with a moderate trough in between Volume contracts on second peak as a further indication of weakening demand. 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 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. Mark a small consolidation before the previous move resumes. Volume confirmation: Volume confirmation: Expands to form the flagpole Expands to form the flagpole Contracts during the flag's formation Contracts during the flag's formation Expands after the resistance breakout. Expands after the resistance breakout. Usually the price target is the length of the flagpole Usually the price target is the length of the flagpole

Ratios Intermarket Analysis Intermarket Analysis Intermarket Technical Analysis is the study of the relationships between the four major financial markets: Stocks, Bonds, Commodities and Currencies. 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 Year US Bond / S&P 500 US$ Dollar / Gold US$ Dollar / Gold

Links and Suggested Reading Links Stockcharts.com Prophet.net Hotcandlestick.com Equis.com Leavittbrothers.com Chartpatterns.com Suggested Reading Suggested Reading Japanese Candlestick Charting Techniques - Steven Nison Japanese Candlestick Charting Techniques - Steven Nison Beyond Candlesticks - Steven Nison Beyond Candlesticks - Steven Nison Technical Analysis of Stock Trends - Robert Edwards & John Magee Technical Analysis of Stock Trends - Robert Edwards & John Magee Encyclopedia of Chart Patterns - Thomas N. Bulkowski Encyclopedia of Chart Patterns - Thomas N. Bulkowski Andy Nogueira – Andy Nogueira –