We provide a comprehensive online technical analysis chart package for traders and investors who prefer the visual approach to market analysis and timing. While a full guide to the breadth of technical analysis is out of scope for this article, we do give a quick briefing on some of the more essential indicators to help get you started.
- How to find and orient around the technical charts
- How to change the scales, chart type and timeframe of the chart
- How to add technical indicators and overlays to help spot trends and reversals
- How to compare the performance of several instruments
- How to save your settings for future recall
You can find the technical analysis charts through one of two routes. Firstly, through the site menu via Tools > Analyse Charts
or via any StockReports by clicking on the chart tab.
Once you’ve found the TA suite you’ll see a split window with the settings on the left and the charts on the right. The settings contain many functions we’ll shortly be discussing, while the chart area is split into one or more sections depending on the number of indicators added to the main chart view.
You can tell which graph you are viewing by looking at the top of the main chart view. The security name is published at the top left of the chart with a summary of the chart periodicity type - daily, weekly or monthly - and latest date. There is also a key summary of all the indicators currently published on the chart.
You can search for another share to chart by using the first input field in the Chart Settings panel. Try searching for a share’s name or ticker - a dropdown menu will appear and you can click the entry of choice or press enter to load.
The next form field in the Chart Settings panel changes the time range. We provide:
- intraday 15 minute charts for 1 day or 1 week timeframes
- daily charts from 1 month to 1 year timeframes
- weekly charts for 2 or 3 year timeframes
- monthly charts for 5 year or greater timeframes
Please note that the underlying periodicity (daily, weekly, monthly) drives the periodicity of any technical indicators added to the chart. So a daily chart with a 200 period moving average will have the 200 day moving average, but when switching to a weekly timeframe a 200 week moving average will be selected. This does catch a few people out so be aware of it.
We provide 3 major chart visualisation types which are based on different combinations of the core OHLCV - open, high, low, close and volume - data. The open price is the price which a share opens trading on that day, the close price is the price at which it closes trading, the high price is the highest traded price on the day and the low price is the lowest traded price on the day. Some know this data set as the OHLCV data.
1. Basic line charts - which join up each day’s closing price into a continuous line.
2. Candlestick charts - which use full OHLC data. Candlesticks are an old Japanese invention that help investors more clearly visualise a day’s trading.
- Days where the close price is higher than the open price are marked as a coloured green rectangular body.
- Days where the close price is lower than the open price are marked as a coloured red rectangular body.
- An upper line extends vertically from the body when the high price is higher than the highest of the open or close price. This is known as the upper shadow.
- A lower line extends vertically down from the body when the low price is lower than the lowest of the open or close. This is known as the lower shadow.
There are entire books written on Candlestick charting with the most famous being Japanese Candlestick Charts by Steve Nison.
3. OHLCV charts - often known as ‘bar charts’ these are a simpler representation of OHLC data than candlestick charting and preferred by some. The are represented by a single vertical line that represents the range of the day’s trading (from low to high) and two tick marks which represent the opening price (on the left) and the closing price (on the right). Down days are represented by a red line, up days by a green.
At the bottom of the chart settings panel are two checkboxes. These can be used to change the behaviour of the y-axis.
The first “Log Scale” will change the y-axis to a logarithmic scale.
Log scales are particularly useful when looking at the price performance of shares that have moved a long way. A share that grows every year by 20% compounded will have an exponentially upward curving share price chart. This can make it hard to see the relative price performance from year to year. Here’s a chart from Domino’s Pizza UK that illustrates this.
Domino’s with a Linear Axis:
The above chart looks spellbinding and it looks as though the share is accelerating in performance. But using a logarithmic axis we can see a truer story of year on year performance:
Domino’s with a Logarithmic Axis
The log chart normalises the growth from year to year - so a 20% compounded growth chart would effectively display a straight line. In the Domino’s case above, the performance has been remarkable, but we can see that the gradient of the chart has lessened in recent years. Between 2008 to 2016 the growth rate slowed compared to its earlier performance from 2001 to 2008.
The percentage scale helps to view the absolute performance of a share over a chosen timeframe. It replaces the y-axis with a percentage axis that shows the % gain or loss since the beginning of the chart timeframe. This is an independent setting to the Log scale choice so both can be chosen at once as shown below.
The daily volume of shares traded is a key metric in technical analysis. Many investors like to see price breakouts up or down confirmed by an upsurge in volume.
The volume can be visualised as a series of vertical bars on charts. It can be added as an indicator in a separate panel below the main chart (see indicators section below) or as an overlay on the main chart panel by clicking the checkbox.
Next on the Chart Setting panel is Overlays. As the name suggests, these are tools that overlay price charts to help you interpret them.
The Overlays available include:
- Bollinger Bands - a volatility measure that takes a stock’s 20-day simple moving average and plots an upper and lower band two standard points of deviation away from the SMA line.
- Parabolic Stop and Reverse (SAR) - a stop-and-reverse trading tool that rises as a price accelerates, but stops and reverses when the trend stops.
- Donchian Channel (20 and 55 day) - a trading system that calls for an entry when a price hits a 20 or 55-day high and and exit when the price hits a 20 or 55-day low.
- Envelope (SMA 20 +/- 10%) - takes the 20-day moving average and plots two bands (an envelope) 10% either side.
We provide a fully fledged technical charting package for all the stocks listed in our database. If you click the 'Chart' tab at the top of any stock report page, you'll find the it (here's an example).
We discuss some of the most predictive/useful TA indicators in the Momentum section of our Stock Picking Education Centre - see for example this explanation on Moving Average Convergence Divergence (MACD).
In order to support new users unaccustomed to technical charting packages, we have also provided a list of useful links to Wikipedia articles.
- Technical Analysis
- Accumulation/distribution index based on the close within the day's range
- Average true range - averaged daily trading range
- Bollinger bands - a range of price volatility
- Breakout- when a price passes through and stays above an area of "support" or "resistance
- Commodity Channel Index- identifies cyclical trends
- Coppock- Edwin Coppock developed the Coppock Indicator with one sole purpose: to identify the commencement of bull markets
- Elliott wave principle and the golden ratio to calculate successive price movements and retracements
- MACD - moving average convergence/divergence
- Momentum - the rate of price change
- Money Flow - the amount of stock traded on days the price went up
- Moving average - lags behind the price action
- PAC charts - two-dimensional method for charting volume by price level
- Parabolic SAR - Wilder's trailing stop based on prices tending to stay within a parabolic curve during a strong trend
- Pivot point - derived by calculating the numerical average of a particular currency's or stock's high, low and closing prices
- Point and figure charts - charts based on price without time
- Profitability - measure to compare performances of different trading systems or different investments within one system
- Relative Strength Index (RSI) - oscillator showing price strength
- Resistance - an area that brings on increased selling
- Stochastic oscillator, close position within recent trading range
- Support - an area that brings on increased buying
- Trend line - a sloping line of support or resistance
- Trix - an oscillator showing the slope of a triple-smoothed exponential moving average, developed in the 1980s by Jack Hutson
Do feel free to raise a support ticket if you have further queries via the Green Support Messenger.
Towards the bottom of the Chart Setting panel is an option to Compare to…. As the name suggests, this allows you to add other instruments to the same chart, such as stocks or indices. Additional instruments will appear in different colours, with a key at the top of the chart.
With so much customisation available with the charting tools and technical indicators, we’ve made it possible to save your preferred settings. By clicking Save these Settings? at the bottom of the Chart Settings panel, you’ll now see the same settings for every stock chart you view.
Finally, for further details about charting and technical indicators, you can explore the Chart Glossary.