Stock Charts For Dummies book cover

Stock Charts For Dummies

By: Greg Schnell and Lita Epstein Published: 02-21-2018

The easy way to get started in stock charts

Many trading and technical analysis books focus on how to use charts to make stock trading decisions, but what about how to actually build a chart? Stock Charts For Dummies reveals the important stories charts tell, and how different parameters can impact what you see on the screen. This book will explain some of the most powerful display settings that help traders understand the information in a chart to find outperformance as its beginning.

Stock Charts for Dummies will teach you how to build a visually appealing chart and add tools based on the type of trading or investing decision you're trying to make. It will also introduce you to the pros, cons, and best practices of using three key types of charts: Candlesticks, Bar Charts, and Line Charts.

  • Build and use technical chart patterns
  • Increase profits and minimize risk
  • Track and identify specific trends within charts

A unique guide for beginning traders and investors, Stock Charts for Dummies will help you make sense of stock charts.

Articles From Stock Charts For Dummies

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36 results
Stock Charts For Dummies Cheat Sheet

Cheat Sheet / Updated 03-25-2022

You can find hundreds of books on technical analysis and using stock charts to make trading and investing decisions, but if you don't know how to properly build those charts, the information in them may be garbage. Stock Charts For Dummies helps you develop your own charting style to match your own trading and investing style. Here, you get the basics on chart attributes, overlays, indicators, trading techniques, and journaling tips.

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Setting Up a Specialized Monthly Area Stock Chart

Article / Updated 03-15-2018

Area charts are just another way of displaying a line chart for stocks. They are commonly used on TV to help the viewer distinguish the price line more clearly. Area charts also offer a unique style that is different from a daily chart with candlesticks. One of the nice parts about charting is creating attractive, colorful charts that you enjoy looking at to review. Monthly charts are not reviewed that often, so contrasting this ChartStyle to a daily candlestick chart can be refreshing and generate new perspectives. Once you have chosen your indicators, you can review them by looking back on the chart to see whether they help you find important trend changes in advance or at least in a timely manner. Try using the RSI indicator and notice the support/resistance levels in bull and bear markets. Large institutional investors may use monthly charts for their guiding principles in the current portfolio. For individual investors, monthly charts are a great support tool for buying stocks and building confidence based on longer-term indicators. The image below shows a monthly area chart for copper stock ($COPPER). These three questions are valuable. Where is the price on the right-hand side? Have any trends been broken? Where are the horizontal support/resistance levels? Copper has moved from the 50 percent level on the scale to about three-fourths of the way up. It has also broken a five-year downtrend. The 12-month moving average does a great job of highlighting bull and bear markets. Copper was used to show that you can view industrial metals and other commodities on the StockCharts.com website. Here are some details to pick up from the chart above: The relative strength of copper compared to the S&P 500 ($SPX) is above two-year highs, so this chart is outperforming the $SPX. That is a strong first signal. The accumulation/distribution line is at new highs, so that is very bullish. The volume is very, very strong and supportive. The percentage price oscillator (PPO) is above zero, and a major momentum downtrend has been broken. This is clearly a bullish tone for the metal. With this very positive monthly perspective, investing in copper-related mining stocks or construction equipment used in mining has a strong supportive backdrop. If the relative strength started to underperform or the price moved below the 12-month moving average, that would give you different signals that you could use for your portfolio management. The image below shows the settings for the monthly area chart. In particular, note that the chart was set to a monthly period over a range of 18 years. A simple moving average was used and set the color to green so you can easily see it against the black price line. The following indicators were also set: Price, Accum/Distribution line, Volume, and Pct Price Oscillator (PPO). Save your monthly line chart ChartStyle. You may prefer the line chart to the area chart or vice versa. You may find you want to do more with area charts because you find them easier to use. Try using daily or weekly settings on area charts to see whether doing so helps you get around the detail of candlestick and bar charts.

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Following Technical Clues to Help Manage Your Trades

Article / Updated 03-15-2018

Managing your trades is a constant job for a good trader. You can use technical clues to help you make optimal trading decisions. After a stock has drifted sideways to down, a few key technical events happen: The stock touches an important moving average. Some of those are the 10-week moving average, 20-week moving average, and 40-week moving average. Expect bounces off some support. The stock goes low enough to get oversold readings on technical indicators, such as the relative strength index or RSI (30 or 40) or stochastics below 20. These are typical buy areas. Trend lines are broken. Look for ways to hold strong stocks that may be consolidating. Selling some on a break can lock in profits. Price breaks below where the price has bounced up from before. After multiple attempts to hold above the previous lows, a lower low can be a clue that the support is fading. Rising stocks don’t make lower lows. One low might be an exception for a few weeks, but uptrends have a series of rising lows. The stock starts to make new 52-week lows. The chart below shows Amazon (AMZN), which is one of the world’s juggernaut companies. By dominating one particular space so well, Amazon has been crushing everyone in its path. But Amazon investors have ridden some massive swings. For example, in 2014 the Federal Reserve had lots of stimulus going on to help the economy heal from the financial crisis. The market was roaring higher until the oil business struggled in late 2014. But Amazon was a dog all year, after years of running higher. The chart above shows a few big things: Moving averages: As an investor, what will you hold through? Working from the left to the right, Amazon was finding support at the 10-week moving average. As 2014 started, Amazon had a big down week that wiped out about ten weeks of price gains. The stock dropped into May, losing $125/share before finding support at $285, which was the January high of 2013. Indicators bounce from oversold levels: The stock continued to wobble and make lower highs all year. The support level of $284 held, but investors holding the stock throughout the year were staring at losses for the year of 30 percent. Was Amazon’s long-term top finally here? Trend lines: Use previous run-ups in the stock price to find a similar slope for trend lines. A short, sudden burst is not a good trend line slope, but one with a reasonable angle (45 degrees or so) is a better place to watch for support. Price support and new 52-week lows: All the moving averages collapsed together in 2014, and Amazon struggled. Heading into 2015, Amazon risked gapping to new 52-week lows. Great stocks make higher 52-week highs, not lower 52-week lows. On the January 2015 earnings call, the stock roared! It broke above all three moving averages; the moving averages were in a bullish alignment, with the short-, then medium-, and then long-term averages above each other; and Amazon more than doubled in price in one year. Price support held!

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Selling Stocks Before They Head South

Article / Updated 03-15-2018

Selling stocks for a loss is part of technical trading. Obviously, the preference is to sell stocks when they’re winners. The worst trades are the ones that immediately reverse when you enter into them and take you to a loss position. Taking small losses rather than large losses is akin to paper cuts versus amputations. If you can keep that discipline to keep losses very small, you will make a lot of money in the markets. Some very profitable traders lose money on 40 to 60 percent of their trades. Some settings on StockCharts.com can help with exiting a stock based on technical indicators. Chandelier exits Chandelier exits can help indecisive investors. Chandelier exits are placed as a line on the chart that is a maximum retracement off the most recent high. As the price moves up, so does the line. Eventually the stock drops in price and kicks you out. Put the overlay on the chart by selecting Chandelier Exits from the Overlays drop-down menu and click Update. Check to see whether the price goes below the line too often. If so, increase the range from 3.0 to 4.0 until the line fits the stock better. Two chandelier exit lines are shown on the panel with the price bars. The Cabot Oil and Gas (COG) weekly chart is shown above. The chandelier exit set at 3.0 would have kicked you out in October 2016, but the setting of 4.0 would have been okay. In that example, changing 3.0 to 4.0, which is four times the average range for a week rather than three times the average range, works better as a setting. However, for most of the downside moves in 2014 and 2015, getting out earlier would have been better. You may need to eliminate the other moving averages to clearly see the chandelier exit line on your charts, but the actual price level is shown on the legend. Parabolic stop and reverse Parabolic stop and reverse, commonly called parabolic SAR, moves the stop closer to the price as the advance continues. Eventually, the stop is very close to the price and kicks a sell signal. Parabolic SAR is found in the Overlays area. The image below shows the default settings for the parabolic SAR. The parabolic SAR dot will move up above the highest price recently recorded and move the system to a sell signal. This system works well on strong trending stocks, but is terrible during sideways consolidations. For Cabot Oil and Gas, the parabolic SAR was on a sell signal for most of 2015. In 2016, it switched to a very profitable buy signal. However, from June 2016 through most of 2017, the sideways chop was an awful solution, with every trade losing money as a buy-high, sell-low trade. In a full parabolic SAR system, you would short the stock when the system reversed, until the price of the stop was hit to the upside, telling you to go long on the stock. In this example, shorting the stock would have only doubled your losses in the sideways chop. You don’t have to short the stock; you can just sell the shares you have and wait for another buy signal to trigger on the parabolic SAR or use other indicators you like. For this reason, use the parabolic SAR on strong trending stocks only. The best rule in trading is to have a stop somewhere. If you don’t have a stop, a downturn can really hurt your year-end profit despite all the wins you may have racked up during the year.

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Using Targeted Scans to Monitor Stocks

Article / Updated 03-15-2018

After you’ve determined your portfolio’s goals, you can set up personal scans and alerts to help you monitor your portfolio hourly, daily, or less frequently; the frequency depends on your goals. If you’re actively trading each day or week, you’ll check this information much more frequently than if you’re managing a longer-term portfolio. Each time you log in to your StockCharts.com account, your scans and alerts will be waiting for you. Scans are a way to look for a specific set of conditions. Rather than looking through thousands of stocks every day, you ask the computer, via lines of code, to go look for all the stocks with a specific set of conditions and give you a list. The Advanced Scan Workbench link in the Control Center takes you to the setup area. You may want to develop a model that will help you monitor the best assets to meet your income stream goals. Using the income stream investor model, you can use multiple individual components to create your scan. You want U.S. stocks with a strong SCTR and a dividend yield above 4 percent. Start broadly by defining the country or the exchange, and work to smaller conditions. Define which exchanges you want to see and how much volume is a minimum volume for you. Investors in the United States would likely choose the New York Stock Exchange. Canadian investors would select the Toronto Stock Exchange, whereas British investors could choose the London Stock Exchange. Many investors deliberately choose an international mix for their portfolios to reduce the effect of poor economic conditions in one country. For example, if the economy is sluggish in Canada but doing better in the United States, a Canadian may mix his or her portfolio with both U.S. and Canadian assets. You can select each coding line from drop-down menus on the lower half of the Advanced Scan Workbench page so you don’t actually have to write any computer code. Then just change the settings within the code box. You want stocks that have a dividend, so add that from the Ticker Properties drop-down menu below the coding area. Select “Has Dividend” and click Add. The SCTR greater than 60 means the stock is behaving pretty well, and the Yield threshold can be set by you. Lastly, you can ask it to sort the results using the “rank by” command on the last line. Here’s the final coding: [type = stock] and [exchange is NYSE] or [exchange is NASDAQ] and [Daily SMA(20,Daily Volume) > 100000] and [has dividend is true] and [SCTR > 60] and [Yield > 4.00] rank by [yield] Click Run Scan. A separate tab will appear with Scan Results. The image below shows the scan results with the Rank by [Yield] information on the far right. You will want to put the scan results into one of your temporary ChartLists. Use the drop-down menu above the scan results on the upper-left where it says Available Actions. The Dividend Yield column will disappear when you save this into one of the temporary scanning ChartLists, so check the “preserve the sort order” button as you move the scan you create to a ChartList. When you look at the results on a chart, click the full quote panel toggle in the Chart Attributes area. The dividend yield will show in the full quote panel above the chart. Click “apply style to all” at the bottom of the page under the chart to install the full quote panel on every chart in the temporary ChartList or add the full quote panel to your default view.

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Separating the Strong from the Weak Using Stock Charts

Article / Updated 03-15-2018

Focusing on strong stocks is one of the most important themes of the market. Usually those strong stocks are part of a strong sector. You have multiple methods of finding strong stocks and sectors with technical analysis. StockCharts technical ranking (SCTR) Performance chart using sector exchange-traded funds (ETFs) Relative Rotation Graph (RRG) tool All three of these tools are available if you’re a member of StockCharts.com. (On the home page, you see a green button that says “Free 1-Month Trial.”) From the Members page, you want to focus your tasks on finding strong areas of the market. Understanding how to identify strong sectors and industries quickly is very important. Click along with the following instructions to develop your skill level using the site. Sector summary You will need to drill down into the three sectors very quickly. Combining the various StockCharts.com relative strength tools helps you see strength in the market based on your investment timeline. All of these tools are accessed from the Pro Control Center on the Members Page. In the Pro Control Center, scroll down to Reports & Analysis Tools. Notice the top five buttons in this Reports & Analysis area are all designed to help you see what is going on in relative strength and popularity. Working with the Sector Summary and the Industry Summary, you can find the strong sectors and strong industry groups quickly. Start with the Sector Summary button and use this link to drill down into the industries and stocks. Drilling down into sectors Click “Sector Summary (Drill down into the major market sectors)” to open a screen sorting Sector ETFs. On this Sector screen, adjust the sort order by clicking on the column headers. Click on SCTR to see the top overall sectors first. On the top left, you can click on different time periods. The default setting is Intraday, but it has been adjusted it to show the change over three months. Other time frames are one week, one month, six months, and a year. Three months is a sweet spot. This period is long enough that you can see a meaningful trend start but not too short. Drilling down into industries Click on any sector name and it will take you to the industry lists within that sector. In the chart below, technology is shown. Because you can’t actually buy an industry group, there is no SCTR for each one. Change the time period on the top left to see the industry performance over different time intervals. The screenshot below has one month selected from the drop-down menu. For industries, one-month changes can identify new trends early. You can use three months as well for swing trading. Longer periods tend to be too long for practical use in identifying new trends. Shorter periods like one week can just be normal market oscillations. Almost every sector and industry will have some top-performing stocks, but the best moves take place when the whole industry group is moving and the majority of stocks have SCTRs above 75. By clicking through each of these industries, you can see which stocks are performing well. When large portions of an industry are all surging, focus your attention there. That industry group will probably have one of the largest % Change bars. Above, he computer hardware industry is surging, followed by software. Drilling down into stocks To continue drilling down to the stock level, click on an industry name. The image below shows you the stocks in the software industry. Click on the SCTR column to bring the strongest stocks to the top, with an SCTR in the 90s at the top of the list. The column to the right of the SCTR shows the SCTR peer group. Click on the U column to sort on market cap size. The stocks with no SCTR may be at the top, but scroll down to the market cap–size stocks you like to work with (for example, perhaps you are only a large-cap investor). Then alter the time using the drop-down menu in the top left corner to one week, one month, or three months. When stocks start to show up on these lists, something is going on that is making investors show interest in them. Stocks that are performing well usually have a reason. Investigate the chart pattern to see whether a stock is changing trend from down to up for a possible entry. Not all stocks have SCTRs due to a small market cap or a low stock price, or they may be foreign small- or mid-cap stocks. With this quick technique, combining the Sector/Industry/Stock drill-down with the SCTRs and the % Change bars, you can find strong stocks fast. Industry summary Under the Pro Control Center, scroll down to Reports & Analysis Tools. The Industry Summary button brings up all the industries on one page and allows you to change the look-back period in the center at the top of the page. Change from intraday to one-week, one-month, and three-months to find emerging areas of strength. When you know which industries you’re interested in, you can use the Sector Summary to drill down and find stocks you like based on your chart settings.

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How to Create a Custom Weekly Line Chart for Your Stocks

Article / Updated 03-15-2018

In your stock adventures, you may need a custom weekly line chart. The image you see below (depicting the stock of Valero Energy, or VLO) shows an initial setup of your ChartStyle for line charts. These are the choices you need to consider: Relative strength indicators against the rest of the market can be helpful on a weekly line chart. You want your chart to outperform other markets. The SCTR and a ratio chart of the stock compared to the S&P 500 ($SPX), the industry group, or the sector is one such example of an indicator you may want to use. The SCTR (which stands for StockCharts technical ranking) refines the information down to a number rather than just a trend. Using the Chaikin money flow (CMF) helps identify whether the underlying price action is improving. On-balance volume (OBV) or accumulation/distribution can also help. The price panel is very clean with only a single line on it. Adding some moving average(s) or a price channel would be helpful information so you can more easily see when the price moves above or below the average. In this chart, the 40-day moving average was used; a 200-day moving average could also be useful. The horizontal line at the top shows the highest stock price or resistance level, which in this chart appears to be the point at which the stock price resists going higher. Volume is always valuable in case some clues are hiding there. For example, on high-volume days there likely was some type of news that drove stock sales. If you see a high-volume day, be sure to check the news about the stock before making any trading decisions. The price change you’re seeing may be a very short-term reaction to the news of the day. The percentage price oscillator (PPO) shows momentum. Choices also include the know sure thing (KST), moving average convergence divergence indicator (MACD), or price momentum oscillator (PMO). So what are you looking for when you trade with a custom weekly line chart? In the case of the image above, each indicator is giving you positive signals as the price is breaking out. Breakout traders would buy this breakout and sell if it moved back below the breakout level. Here are the details on each panel: You can see the SCTR is moving above 60. It is not great, but it is still outperforming 60 percent of the peer group. If it continues to move above 75, that would reinforce the bullish case. The CMF recently turned positive. The price is breaking out to new highs. That is how new bull moves start. The price is making higher highs, leaving the consolidation behind. The 40-week moving average is trending higher. The volume is drying up, suggesting an explosive move if volume starts to expand. Notice that the two previous summers had significantly higher volumes. Six of the last eight weeks had lower volumes similar to Christmas or Thanksgiving short weeks. The PPO just broke above a downtrend in momentum while above zero, which is very bullish. In particular, note that the chart settings for a weekly period were set for a range of three years. A simple moving average of 40 days was used and set the color to green so it would stand out from the black line used for the price. Several indicators were also added: SCTR Line, Chaikin Money Flow (CHF), Volume, and Pct Price Oscillator (PPO). Change the indicators and overlays to create your own optimized chart.

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How to Respond to Weird Price Action in Stocks

Article / Updated 03-15-2018

What is weird price action? There’s no singular definition for weird price action when it comes to stocks, but subtle changes in the market can serve as nice clues. Here are some examples: Large outsized candles either up or down become reference candles for future bars to compare against. Tiny candles called dojis, where the market opens and closes at almost the same level, with very little range between the high and the low, show indecision. Is it a sleepy market or indecisive? Dojis are usually found near reversals, but occasionally the market will power on in the same direction. Extremely low or high volume suggests something is changing. When the price has been moving in one of three directions — up, down, or sideways — a change in the candles/volume usually shows up to mark a change in trend. In the following sections, you will see some unusual price action that you may see during a quick check and provide pointers on what to do. Volume and price bar extremes Visually keep track of the following points, which can clue you in on how to respond to weird price action: Inside days and outside days Highest- and lowest-volume days Largest and smallest candles, including wicks Largest and smallest candle bodies In the image below of the NASDAQ 100 Index, the lowest volume occurred on the final low point (April 17) before the market accelerated higher. The highest-volume candle up to that time marked the top. The lows made with the high volume on May 17 continue to be the lows later on in the chart. The market goes down to that level again to see whether more buyers will step in. The large price candle on May 17 with big volume was the first such shock in months. Paying attention to where those high-volume bars occur is very valuable (the volume bars are below the price chart). High-volume days that occur with an outside day are especially worth noting. While they may not mean anything, they usually mean something. The odds are that something is changing. Outside days are an important signal — as the market moves forward after one of those days, compare the market behavior after with the market behavior before the high-volume day. Does it resume its previous trend? Compare where high-volume days are. Are the high-volume candles starting to change the character of the market? Are more than just the occasional candle getting really long? On the right-hand side of the image below, there are eight filled sizable candles over a few weeks. On the left side, there are two, maybe three, in three months. Volume can help signal reversals. If the price starts to fall meaningfully on higher volume for multiple days in a row, this is usually a bigger clue of a trend change. Stay alert on a high-volume day, but don’t overreact and get out of a good stock too soon. If the high-volume day is making you concerned, research further using other tools in your chart toolkit for time periods shorter than a week to see whether there are other buy or sell signals. Outside reversal dates on weekly charts An outside day is when the price bar extends above and below the previous day. An outside week is when the same thing happens on a weekly chart where the price made a higher high and a lower low. While one outside week may come and go, when multiple weeks start to cluster, the market is struggling to make higher highs. Weekly outside reversals are important clues. In the image below, the June 9 (2017) candle happened on a Friday, creating an outside week. After pushing to a new high in the morning of June 9, it closed the day and the week lower. The price action from that one candle marked the highs for the next month, and the market moved lower. It becomes a reference candle to keep referring back to. Weekly charts summarize the market quite cleanly. The uptrend continues with almost every week providing a higher high. The arrows point to outside weeks. Almost every one of them is a bearish candle. The last week of March 2017 is a bullish outside candle. These clusters of outside weeks are significant in marking congestion zones that the market has to work through. Staying in tune with outside weeks can be a simple way to monitor the progress of the market. Generally, a normal week is a week with higher highs and higher lows. Three conditions suggest watching the market a little more closely: A lower low A close near the lows of the week after pushing to a higher high Outside weeks None of those are sell signals; they just suggest paying a little more attention to the price action.

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Reviewing the Breadth of Different Stock Exchanges

Article / Updated 03-15-2018

Before you jump into stocks, it’s a good idea to understand the breadth of three different exchanges: the NASDAQ Stock Exchange, the New York Stock Exchange (NYSE), and the Toronto Stock Exchange (TSE). The NASDAQ composite breadth The NASDAQ composite ($COMPQ) is the name for all of the NASDAQ listed stocks compiled together. The NASDAQ Stock Exchange has a lot of small tech companies that struggle as well as some exceptionally huge, successful tech companies. The index behaves different from the S&P 500 ($SPX) and can be helpful in monitoring breadth as an early warning. The threshold levels never get as strong, and the charts can show weakness early. This image shows the NASDAQ composite ($COMPQ) with a bullish percent index ($BPCOMPQ) below the level the market usually breaks down from (60 percent). It also shows that the percentage of NASDAQ stocks above the 200 DMA ($NAA200R) is only at 50 percent. It will be difficult to make higher highs if only 50 percent of the stocks are above the 200 DMA. The settings on the chart to make the display can be confusing at first. This image shows the settings used to create the NASDAQ composite chart shown above. The chart style for the percentage of stocks above the 200 DMA is a histogram type. Use the overlay tool to add reference lines on the chart. The NASDAQ 100 Index ($NDX) is typically the fastest-moving index because of the high-growth-rate companies that are listed there. The NASDAQ 100 list includes all the giant tech companies. Because of the size of these large companies, as long as this index continues to do well, the NASDAQ 100 market can continue to outperform. Almost all of these companies are also in the S&P 500. When the NASDAQ 100 chart holds up, usually that is supportive of the S&P 500. If the NASDAQ 100 breadth starts to weaken, that can be a much better clue that the overall market is probably going to pull back deeper than most people expect when the correction starts. The image below shows that the bullish percent index is very weak, with only 52 percent of the stocks on a buy signal, but the percentage of stocks above the 200 DMA shows 69 percent, well above 65 percent. Which chart is right? If the percentage of stocks above the 200 DMA is still holding up well, the market will probably try to rally before a more serious break. If a lot of stocks are well above the 200 DMA, a significant move will be required to get below the 200 DMA. Lastly, while it looks like the crash of the tech stocks in 2000 was obvious in the top panel, the bullish percent index was whipping wildly in extremes for multiple years. These huge percentage swings made it difficult to be on either side of the market. Unfortunately, the data for the percentage of stocks above the 200 DMA was not calculated at the time. The New York Stock Exchange composite breadth While the NASDAQ Stock Exchange has more high fliers, the NYSE has a lot of the great stable U.S. companies that investors can trust to deliver dividends and growth of capital. With so many banks, utilities, and pipeline companies listed on the exchange, the breadth charts are different as well. A significant majority of financial, insurance, and real estate stocks are listed on the NYSE. These stocks don’t have a growth rate that compares to the NASDAQ 100, but the shareholders of these stocks are focused on dividends and consistent growth. This type of investor is a longer-term investor and does not typically chase momentum stocks. The chart below shows both indicators for the New York Stock Exchange composite right at the levels where it usually holds. The levels are so close, there was not room to post the lines with the market levels. The Toronto Stock Exchange breadth Canada exports a lot of products to the United States, but its stock markets can be very different. The chart shape in August 2017 makes the Canadian market breadth an interesting contrast to U.S. market breadth to see how the charts break down. The BPI is well below the 70 percent level, and the percentage of stocks above the 200 DMA is below 46. The market has moved 1,000 points away from the high while the U.S. markets hit all-time highs. Using the breadth indicators would help Canadian investors see the weakness in their market before their trading account becomes damaged, while U.S. stocks continued higher almost every week. The Canadian market has a significant weighting in oil and gas, financials, and mining. These three groups make up two-thirds of the market in Canada. While the developments in other sectors of the market can add thrust, at least two of the major sectors have to be doing well for the market to go higher.

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How to Make a Watch List for Stocks

Article / Updated 03-13-2018

Creating profits starts by having a main watch list for stocks that you continually move good setups into. Chartists have looked at a healthy list of ideas over the years. You can take advantage of this experience at StockCharts.com, where there is a scan engine that allows you to sift through thousands of stocks in order to spot opportunities you may have been missing. This capability makes the engine one of the most powerful tools available to you on StockCharts.com. Analysts and users have created over 75 scans and sorted the results for investors all on one page called Predefined Scans. You pick from these predefined scans to create a ChartList dedicated to scans, and then populate it with the ones you like best. Surveying predefined scans You can use the predefined scans to find the stocks you like and want to watch. This is a great place to start. Populating your watch list with stocks that have good setups is an important part of using StockCharts.com to make your charting experience great. After you log in to the site, click on the Gears icon beside the ChartLists button in the bottom right-hand corner of the Members page. Make sure the Scan Center option is turned on. Close the window. Scroll down the Members page until you are just above the ChartLists banner and click on the Predefined Scans button. Clicking this link displays a window with the Predefined Scan Results summary table. There are hyperlinks all over this page so you can click on one of the links and see the list of stocks that was found by a particular scan. Many predefined scans are all set up for you. The following is just a sampling: Seventeen bullish technical indicators Seventeen bearish technical indicators Five candlestick bullish reversal patterns (positive change in the direction of the price trend) Five candlestick bearish reversal patterns (negative change in the direction of the price trend) Two candlestick continuation patterns (the price trend continues at the same level) Five single candlestick patterns This list is a veritable gold mine with so many interesting scans that demonstrate different ways to look at the market. For example, consider Keltner channels. Scroll down the list of technical indicators until you find the Keltner channel scan. If you click the link in the column of numbers on the far left, it opens the scan results across every exchange. For this example, zoom in and click on the link for the NASDAQ. This provides a list of companies that you can look through. Saving scans to ChartLists After you’ve taken the time to pick the scans you want to view regularly, you can save these scans to temporary scan lists until you decide how you want to use them. Here are the steps to do that: Click on the column headers to change the sort order of the companies. Click on the SCTR last and put the largest SCTR number at the top. The stocks that populate the list will be current on the day you click. (By the way, SCTR stands for StockCharts technical ranking.) Click the drop-down menu for Available Actions at the top. It may extend above or below the drop-down, so scroll up if you don’t see it at first. This gives you an opportunity to save these predefined scan results into a ChartList without typing each company into every list. Select Store these results in a new ChartList from the drop-down menu. A pop-up box should appear. Fill in the information for the ChartList name. An example of the ChartList title is shown here as a temporary scan file, 1500 – Scan list 1. Click the Preserve Sort Order toggle if you want to save the current order of the SCTR ranking. This was the last column you adjusted, so that will be the sort order preserved. If you click the toggle, when it saves the stocks into the ChartList, it will add a number to control the sort order to show the stocks with the strongest charts first. The SCTR allows you to quickly see which charts are better.

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