Technically Speaking, April 2014

Key Ingredient 1: Global Availability

You never know when an idea will hit or where you’ll be when you need access to your charts. The office is the logical place, but market technicians are also thinking about the markets at home, when visiting clients, at restaurants or when traveling. Getting an idea into your analysis toolbox requires global accessibility on multiple devices.

StockCharts members can fetch custom SharpCharts and ChartLists anywhere with an internet connection. Revise a chart at home and the revision will be there when you access your account at the office. Change a client’s ChartList during a meeting and the changes will show up when you log into your account at the airport. Hear a news report about an intriguing company at home? You can immediately pull up the chart on your laptop and add it to a ChartList. In short, you can access your SharpCharts
wherever and whenever you want. SharpCharts reside on our servers in a secure environment with 99.77% uptime in 2013.

StockCharts members can also access their charts from more than one computer and on different devices, such as tablets and smartphones. This is especially handy for making live presentations during market hours or reviewing portfolios with clients.

SharpCharts need no additional software or plugins that can slow your computer to a crawl and create an unstable environment. StockCharts members can access their charts with a standard Windows or Mac browser. Yes, you can use your preferred operating system and your favorite browser (Chrome, Firefox, Safari, Internet Explorer, Opera).

Key Ingredient 2: Total Flexibility on Sizing

Your analysis is written, the page layout is ready and you need a chart in a specific shape or size. Easier said than done, right?

SharpCharts makes it happen with total flexibility on chart size, shape, making it a snap to fit charts into your layout and maintain image quality. A square chart may be best for a Word or PDF document, while a wide rectangle chart may fit better in a webpage or PowerPoint presentation. Sometimes you need a long, narrow rectangle to fill a little extra space at the bottom of the page.

Figure 1

In addition to providing a dozen preset chart sizes, SharpCharts gives users the flexibility to set specific dimensions at the source to ensure the highest-quality graphics. Sizing at the source does not affect image quality because StockCharts creates a new image file every time it resizes.  That means large SharpCharts will have the same high-quality resolution as small ones. It takes just a few seconds to enter the exact dimensions and create a custom chart that is ready to insert into a publication.

Figure 2

Images for books and other printed publications sometimes require a much higher resolution than the standard SharpChart.  StockCharts gives publishers the option to create Scalable Vector Graphics (SVG) for these charts.

See Appendix B for tips on importing SharpCharts into MS Word and other applications.

Key Ingredient 3: Customizable Colors

Sometimes technicians need basic black-and-white charts for a large printed publication. Other times they need high-quality color charts for a PowerPoint presentation or a web page.

SharpCharts makes this happen with more than two dozen preset color schemes. Large publications with dozens of charts can use monochrome (gray-scale) charts, which are also ideal for printing. Full-color charts can enliven websites and PowerPoint presentations. SharpCharts also provides a preset color scheme for users who have color vision impairments. Figure 3 shows the Sunset color scheme.

Figure 3

SharpCharts price plots, indicators and line studies are fully customizable.  Assigning different line styles and colors makes each chart feature stand out. For example, price data could be shown as black and red candlesticks, Bollinger Bands could be green, and thick trend lines could be shaded red (Figure 4). Contrasting colors make it easy to distinguish the price plot, indicator and trend line.

Figure 4

Monochrome or gray-scale charts present a special challenge when trying to differentiate between indicators and line studies. Moving averages cross each other and prices cross moving averages. If these indicators all use the same color and style, you cannot tell which one is which. SharpCharts solves this problem by offering flexibility on line style and line color. For example, Figure 5 shows a 20-day moving average using a thick black line and a 50-day moving average using a gray dashed line. See Appendix A for a list of color options.

Figure 5

Key Ingredient 4: Diverse Annotation Features

A chart certainly paints a thousand words, but sometimes technicians need to add comments and annotations to reinforce the message. This is especially true when communicating an idea to a client or making a presentation.

The SharpCharts workbench is packed with annotation features, including text call-out boxes, line studies, a box-drawing tool and a circle-drawing tool. These annotation features make it easy to communicate ideas clearly and concisely.

Figure 6

Figure 6 uses Walgreen (WAG) to illustrate highlights of the key annotation features. Working from left to right on the chart, the curved green lines show an inverse head-and-shoulders pattern from late May to early  September with a red line marking neckline resistance. The blue vertical dotted line marks the day WAG was added to the portfolio. An oval shaded with the opacity tool identifies the consolidation after the breakout. The box tool marks the resistance and support zones that define the larger consolidation from November to early February.

The call-outs on the Walgreen chart identify the support zone and the breakout, while a simple text entry identifies the resistance zone. The trend line extending up from the July low is a dashed blue line with maximum thickness. The indicator window at the bottom shows the price relative with a text box labeling the indicator. The green dashed line marks the upward trajectory and signals that Walgreen is outperforming the S&P 500.

Key Ingredient 5: Accurate Data

A stock chart is only as good as the data behind it. After the market close, exchange officials audit stock data to ensure that the open, high, low, close and volume are correct for each issue. These “audited” updates are then sent out by the exchanges, making prior data out-of-date. Technicians need the latest data update to ensure accuracy for their stock analysis.

StockCharts works hard to ensure data accuracy. First, we have several people dedicated to keeping our databases in sync with ticker changes and updates that happen throughout the day. Second, we re-collect data from our vendors several times each day after the market closes. This ensures that you are working with the most accurate data in a timely manner.  Ultimately, our goal is to have “official” numbers in our database. 

All data, data updates and data adjustments are included in the membership prices. There are no hidden fees. In other words, don’t expect an extra fee from the exchanges or an extra charge for accessing a special data set. All data and exchange fees are included in our subscription packages.

Key Ingredient 6: Custom Data Imports

Many technicians have custom indicators or special data sets that require charting. While it is easy enough to create an MS Excel chart depicting this data, serious technicians soon learn the popular spreadsheet program does not “excel” at creating sophisticated financial charts.

StockCharts members can import data sets and plot data series in a SharpChart. This data can include the open, high, low, close and volume, or only the close (one value). The SharpChart workbench lets users set a desired chart size, pick their colors, apply indicators and add annotations. Data imports make it easy to analyze economic indicators, sentiment data, proprietary indicators and even equity curves.

Figure 7 shows sentiment data from the American Association of Individual Investors (AAII). This data was imported from a spreadsheet file to create a user-defined index in SharpCharts. The AAII example shows three user-defined indices: AAII Bulls, AAII Bears, and the AAII Bull-Bear Spread. Note that the data set can be positive or negative. Obviously, the AAII Bull-Bear Spread fluctuates above and below the zero line. The AAII Bears data is negative to contrast better with the AAII Bulls data, which is positive. Also notice the red cumulative line in the middle window, which plots a running total of the Bull-Bear Spread.

Figure 7

Key Ingredient 7: Total-Return Data

Price is not the only driver of stock and ETF returns. Dividends still play an important role in returns, even if they might not seem as popular today as they used to be. Of course dividends are integral to the returns of utilities, REITs and other traditional high-yield securities, but consider this: As of midMarch 2014, AbbVie, Chevron, Cisco, Clorox, Intel, Lockheed Martin, Microsoft, Merck and Pfizer had dividend yields above 3%. Chartists need the option to reflect these yields and measure total return on their charts.

SharpCharts give technicians the option to show total-return price data or unadjusted data. Total-return price data includes dividends, while unadjusted data leaves them out. This makes a big difference for securities with relatively high dividend yields.

Let’s compare the total-return chart for the Utilities SPDR (XLU) and the unadjusted chart. Simply precede the symbol with an underscore to see unadjusted data (i.e. _XLU). Figure 8 shows unadjusted XLU surging in early 2014, but failing to take out the 2013 high. The indicator window shows one-year performance with the ETF returning 8.8% from February 25, 2013, to February 24, 2014.

Figure 8

Figure 9

Figure 9 paints a different picture by using total-return data. First, notice that on a total-return basis, XLU did exceed the 2013 high and recorded a 52-week high in 2014. Second, notice that the one-year return is just over 13%, which is around 50% more than the return on the unadjusted chart. XLU and other high-yield securities attract dividend-conscious investors who need to see the total return. Also, note that SharpCharts users can show dividend amounts on the price chart. Figure 9 shows four dividend
payments over the past year.

Key Ingredient 8: StyleButtons to Save Time

Publications and presentations are not one-off events, and neither are chart creations. Technicians put a lot of effort into creating custom charts for print publications, websites and PowerPoint presentations. You should be able to save your efforts with templates that can easily be applied when updating a publication or preparing a new presentation.

SharpCharts users can quickly and easily create, manage and apply their favorite chart settings. First, you can create dozens of chart templates called ChartStyles. Second, you can then create StyleButtons based on these ChartStyles. These StyleButtons are conveniently located just to the left of every SharpChart.

Figure 10

Figure 10 shows these StyleButtons just to the left of the chart. With one click of the StyleButton, you can apply a specific ChartStyle to the current chart. This one-click application streamlines the process and makes it easy to load specific chart settings.

For example, say you have a publication with over 100 monochrome charts based on a specific chart setting. If you are adding new charts to this publication, you will want to make sure that they are in the same format to ensure uniformity. Simply save one of the existing monochrome charts as a ChartStyle, create a StyleButton and then use this StyleButton to apply that style to new charts.

Many technicians have also developed specific chart settings for a particular group of securities or an indicator group. These settings can be instantly applied using StyleButtons. Different security groups can include stock indices, breadth indicators, momentum stocks, high-yield stocks and ETFs.  Indicator groups can include volume-based indicators, trend-defining indicators, momentum indicators and overbought/oversold oscillators. See Appendix C for a list of SharpCharts indicators.

Want to present your favorite volume indicators for a particular stock? Click on your volume StyleButton to instantly apply that ChartStyle. Want to show the momentum picture for a particular ETF? Click on your momentum StyleButton to immediately view the key oscillators. Want to show relative strength for a security? Click on your relative strength StyleButton to compare performance against different asset classes.

Key Ingredient 9: ChartLists for Easy Organization

Technicians working with hundreds of charts need an efficient way to manage them. You do not want your presentation charts mingling with portfolio charts and watch-list charts. Different chart groups require varying degrees of attention and management. Portfolio charts are reviewed on a regular basis, while presentation charts are usually updated as needed.  Technicians need an intuitive tool to make all this happen.

SharpCharts can be managed easily and efficiently through ChartLists. Users can create up to 350 ChartLists with up to 500 charts in each list. This means you could create specific ChartLists for your various publications, portfolios and presentations. For example, a ChartList named “MTA Presentation 140403″ could be created to store all charts for your MTA presentation.  Having your charts in one place makes it easy to update the presentation in the future. ChartStyles can also be applied to ChartLists to redesign a large number of charts at once.”

ChartLists offer endless possibilities for chart management and sharing.  Technicians can create ChartLists for different portfolios, specific stock groups, ETFs, breadth indicators and mutual funds. Advisors can build ChartLists based on client portfolios and use these lists to review positions when visiting clients.

Conclusions

This paper illustrates how SharpCharts can create exceptional visuals for printed publications, slideshow presentations and websites.

It all starts with global availability. The key features presented here can be accessed from any internet connection and on multiple devices. Have a chart idea? Access StockCharts, put that idea to work and have it waiting the next time you log in — regardless of location or device.

SharpCharts is one of the first ports of call when visiting StockCharts. This versatile charting tool gives technicians sizing flexibility, custom colors and lively annotations. Charts can be created, saved and filed in just a few clicks. These charts are high-quality picture images that can be copied and pasted into other applications, and then resized.

StockCharts provides flexibility with its data. Our data is scrutinized throughout the day and re-collected several times after the market close to ensure accuracy and timeliness. Technicians can also provide their own data sets and create user-defined indices, which are easy to update with new data. The option for total-return data or unadjusted data gives technicians the choice to include or remove dividends.

ChartStyles make it easy to create uniform charts and apply formatting with StyleButtons. Once a chart is created and a style applied, it can be saved in the appropriate ChartList to keep your growing number of SharpCharts organized.

Appendix A: Importing SharpCharts into other Applications

SharpCharts may need to be resized when inserted into MS Word, PowerPoint and other popular applications. These three tips will help ensure image quality and keep file sizes under control:

1. Select a shape. Start by choosing the shape you want and creating the corresponding SharpChart. A 600-by-600 SharpChart
would form a square, an 800-by-600 chart would form a wide rectangle and a 700-by-300 chart would form a long, narrow
rectangle. You must first choose the shape to set the aspect ratio—the proportional relationship between the width and height. Size is not so important, but it is best to start with a bigger SharpChart and then reduce the size in your application. Trying to make a smaller chart larger will decrease the resolution and create an unpolished appearance.

2. Insert and resize. Next, paste the image as a picture and resize while maintaining the aspect ratio. Copying and pasting is quick and easy. Simply hover your mouse pointer over the SharpChart, right click (control-click on Mac OS) and choose copy image. After moving back to Word, choose edit from the main menu, select paste special and then picture. When resizing the image, click and drag on the corner dots of the image to preserve the aspect ratio. Note that if you drag from the middle dots between the corners, you’ll override the aspect ratio and distort the image. You can also preserve the aspect ratio by making sure the lock aspect ratio box is checked when resizing via Word’s format menu.

3. Link images to limit file size. File size grows each time you imbed an image into Word or PowerPoint. Documents with dozens of embedded charts can become large and unmanageable. Instead of embedding, you can check the link to file box when inserting an image. In addition to controlling file size, this command updates the linked images anytime you change this source file. This is handy for charts that are updated daily or weekly.

There are many more SharpCharts features and analytical tools available.  MTA members in good standing are eligible to receive a 25% discount on first-time subscriptions to StockCharts. To take advantage of this special offer, please use the following discount code: MTA-2500. Go to: http://stockcharts.com/signup for details.