Paritech
Online Charting Help
Online
Charting is an advanced feature which allows you to choose from a vast list of
charting options to customize a chart to your exact specifications.
Paritech
Charts allows you to view charts with the time frame of your choice. In this
easy-to-use interface, all you have to do is enter a symbol and select the time
period you want to view.
The
ability to overlay moving averages and your other favourite technical indicators
will support your analysis of which stocks to buy, and importantly, when to buy
them.
By
applying technical analysis concepts and techniques an investor is able to form
views as to the prevailing price trends and add a timing edge to their investing.
How to use
Paritech
Charts
To
create a Paritech chart, simply enter a company’s symbol and click the
“Draw” button. If you would like to change the time frame, use the
“Time” and “Frequency” drop-down menus to choose the time frame you
would like to view.
Symbol
Refers
to a unique code used by the Australian Stock Exchange (ASX) to identify listed
companies, e.g. Amcor Ltd’s ASX Symbol is AMC.
Time
The
Time menu refers to the time frame over which the chart will be constructed and
displayed, e.g. you can chose to display a one year chart of a stock. The All
Data option will display the entire data history for that stock.
Frequency
Use
the Frequency menu to specify the periodicity of the data, e.g. daily, weekly or
monthly.
Price Indicators
You can
choose to display any of the following Price Indicators:-
Volume Indicators
You can choose to display any of the
following Volume Indicators:-
You
can create fast or slow moving averages of the price and volume data.
The fast moving average is coloured red and the slow moving average
purple.
Price Displays
You
can choose from any of the following Price Displays:-
Open-High-Low-Close Bar
A bar
chart is the most popular way to display security prices. A bar chart is made up
of vertical bars, with each bar representing the price movement for a time
period (i.e. day, week, month, etc.). Hash marks on the left and right sides of
the bar represent the opening and closing prices respectively. The top of the
bar represents the high price and the bottom of the bar represents the low
price.
Bar
charts, by themselves are used to view the movement of the security's prices
over a specific time period. Indicators can be displayed along with bar charts
to help determine the future direction of a security's price.
Line Charts
A line
chart is the simplest type of chart. Typically the close is plotted for each
time period (i.e., day, week, month, etc.). A single, unbroken line connects
each of these price points.
Line
charts, by themselves are used to view the movement of the security's prices
over a specific time period. Indicators can be displayed along with line charts
to help determine the future direction of the security's price.
A
line chart's strength comes from its simplicity. It provides an uncluttered,
easy to understand view of a security's price.
Candlesticks
Candlestick
charts display the open, high, low, and closing prices in a format similar to a
modern-day bar-chart. Advancing prices are usually accompanied with empty lines
(prices opened low and closed higher) and declines are accompanied with
filled-in lines (prices opened high and closed lower).
Candlestick
charts dramatically illustrate supply/demand concepts defined by classical
technical analysis theories.
The
interpretation of candlestick charts is based primarily on patterns. The most
popular patterns are explained below:-
Bullish Patterns
 |
Long White Line:
This is a bullish line. It occurs when prices near the low and close significantly higher
near the period's high. |
 |
Hammer: This is a bullish
line if it occurs after a significant downtrend. If the line occurs after a significant
up-trend, it is called a Hanging Man. A Hammer is identified by
a small real body (i.e., a small range between the open and closing prices) and a long
lower shadow (i.e., the low is significantly lower than the open, high, and close). The
body can be empty or filled-in. |
 |
Piercing Line: This is a bullish pattern and the
opposite of a dark
cloud cover. The first line is a long
black line and the second line is a long white line.
The second line opens lower than the first line's low, but it closes more than halfway
above the first line's real body.
|
 |
Bullish Engulfing Lines: This pattern is strongly bullish if it
occurs after a significant downtrend (i.e. it acts as a reversal pattern). It occurs when
a small bearish (filled-in) line is engulfed by a large bullish (empty) line.
|
 |
Morning Star: This is a bullish pattern signifying a
potential bottom. The "star" indicates a possible reversal
and the bullish (empty) line confirms this. The star can be empty or filled-in. |
 |
Bullish Doji Star: A "star"
indicates a reversal and a doji indicates indecision. Thus, this pattern usually indicates
a reversal following an indecisive period. You should wait for a confirmation (e.g. as in
the morning star, above) before trading a doji star. The first line can be empty or filled
in. |
Bearish Patterns
 |
Long Black (Filled-in) Line: This is a bearish line. It occurs when
prices open near the high and close significantly lower near the period's low. |
 |
Hanging Man: These lines are bearish if they occur after a
significant uptrend. If this pattern occurs after a significant downtrend, it is called a Hammer. They are identified by small real bodies (i.e. a small range
between the open and closing prices) and a long lower shadow (i.e. the low was
significantly lower than the open, high, and close). The bodies can be empty or filled-in.
|
 |
Dark Cloud Cover: This is a bearish pattern. The pattern
is more significant if the second line's body is below the center of the previous line's
body (as illustrated). |
 |
Bearish Engulfing Lines: This pattern is strongly bearish if it
occurs after a significant up-trend (i.e. it acts as a reversal pattern). It occurs when a
small bullish (empty) line is engulfed by a large bearish (filled-in) line. |
 |
Evening Star: This is a bearish pattern signifying a
potential top. The "star" indicates a possible reversal and
the bearish (filled-in) line confirms this. The star can be empty or filled-in. |
 |
Doji Star: A star indicates a reversal and a doji
indicates indecision. Thus, this pattern usually indicates a reversal following an
indecisive period. You should wait for a confirmation (e.g., as in the evening star
illustration) before trading a doji star. |
 |
Shooting Star: This pattern suggests a minor reversal
when it appears after a rally. The star's body must appear near the low price and the line
should have a long upper shadow.
|
 |
Long-Legged Doji: This line often signifies a turning
point. It occurs when the open and close are the same, and the range between the high and
low is relatively large. |
 |
Dragon-Fly Doji: This line also signifies a turning
point. It occurs when the open and close are the same, and the low is significantly lower
than the open, high, and closing prices. |
 |
Gravestone Doji: This line also signifies a turning
point. It occurs when the open, close, and low are the same, and the high is significantly
higher than the open, low, and closing prices. |
 |
Star: Stars indicate
reversals. A star is a line with a small real body that occurs after a line with a much
larger real body, where the real bodies do not overlap. The shadows may overlap. |
|
The percent price display allows comparison of price performance on the same scale starting at the same point.
Basically, the percentage change of the price is charted over time starting at 0%.
If the price drops by half, then the percentaga change is -50%. If the price doubles, the percentage change is 100%. If the price stays the same, the percentage change is 0%.
Thus, you can compare the performance of company prices and indexes on the same chart. If the price of the first company increases by 20%, its line ends on 20%. If the price of the second company drops by %10, then its line ends on -10%. Likewise, if an index increases by 5%, it's line ends on 5%. By comparing different companies and indexes on the same chart, you can compare their percentage change on the same chart.
An
indicator is a mathematical calculation that can be applied to a security's
pricing data, volume data, or a combination of both. The result is a value that
is used to anticipate future changes in price. A moving average fits this
definition of an indicator. Moving averages are examples of trend following, or
"lagging," indicators. These indicators are superb when prices move in
relatively long trends. They don't warn you of upcoming changes in prices, they
simply tell you what prices are doing (i.e. rising or falling) so that you can
invest accordingly.
Paritech
Charts allows you to place moving averages on price and volume data on a chart.
To plot an indicator, select either the Price or Volume Indicator menu on the
toolbar and scroll the list until the desired indicator appears.
The
averages correlate to the time frequency on your chart. For example, on a 1day
chart, the frequency would be days, thus, the 30 would be a moving average based
on 30 days.
Time
Periods. Enter the number of time periods to use when calculating the indicator.
The term "time" refers to days if the chart contains daily data, or
weeks for weekly data, etc. Note: if you would like to chart all data
available in our database on a given symbol select "All Data" from the
list.
Once
you have made your selection click on the "Draw" button to update the
chart.
As
a security's price changes over time, its average price moves up or down. Paritech
Charts display two different types of moving averages: simple (also referred to
as arithmetic) and exponential. In addition, Paritech Charts will calculate moving
averages of the security's, closing price and volume.
Moving
averages are among the most popular technical indicators. The traditional
interpretation of moving averages focuses on price and volume movement relative
to the average itself. Investors are typically "bullish" when the
price moves above its moving average and "bearish" when the price
falls below its moving average.
A
Simple Moving Average is calculated by adding the closing prices for the most
recent n intervals of time (or "bars") and then dividing by n. For
example, a 21-bar moving average references the closing price of a security over
the past 21 bars. The indicator sums all 21 closing prices and divides by 21,
which produces the average price over the past 21 bars. The Simple Moving
Average gives equal weight to each bar.
Some
market technicians believe that more weight should be attributed to more recent
price action. These analysts may prefer to use the Exponential Moving Average
because it does just this. An exponential (or exponentially weighted) moving
average is calculated by applying a percentage of today's closing price to
yesterday's moving average value.
For
example, to calculate a 9% exponential moving average of a company, first, we
would take today's closing price and multiply it by 9%. We would then add this
product to the value of yesterday's moving average multiplied by 91% (100% - 9%
= 91%).
The
only significant difference between the various types of moving averages is the
weight assigned to the most recent data. Once this "weighting" scheme
has been determined, it is held static over the range of calculations.
The
Relative Strength Index (RSI) is a momentum indicator which measures a
security's price relative to itself and its past performance, thereby indicating
its internal strength.
RSI
quantifies price momentum. It depends solely on the changes in closing prices.
RSI is less affected by sharp rises or drops in a security's price performance
and, therefore, may give a better velocity reading than other indicators.
RSI
is calculated by taking the average of the closes of the up bars (the up
frequency intervals) and dividing them by the average of the closes of the down
bars. The time frame specified determines the volatility of the indicator. For
instance, a 9-day time period under study will be more volatile than a 21-day
time span.
The
RSI ranges between 0 and 100. RSI is said to indicate an "overbought"
condition when it is above 80 and an "oversold" condition when it is
below 20.
A
popular use of the RSI is to look for a divergence in which the price of a
security is making a new low, but the RSI is failing to surpass its previous
low. This divergence could be an indication of an impending reversal in price.
Tops
and Bottoms - The RSI usually tops above 80 and bottoms below 20. The RSI
usually forms these tops and bottoms before the underlying price chart.
Chart
Formations - The RSI often forms chart patterns (such as head and shoulders or
rising wedges) that may or may not be visible on the price chart.
Support
and Resistance - The RSI shows, sometimes more clearly than the price chart,
levels of support and resistance.
Divergence
- As discussed above, this occurs when the price makes a new low (or high) that
is not confirmed by a new RSI low (or high).
On
Balance Volume relates volume to price change. It
is calculated by adding the day's volume to a cumulative total when the security's price
closes up, and subtracting the day's volume when the security's price closes down.
On
Balance Volume is a running total of volume. It
seeks to show if volume is flowing into or out of a security. When the security closes higher than the previous
close, all of the day's volume is considered up-volume.
When the security closes lower than the previous close, all of the day's volume is
considered down-volume.
The
basic assumption, regarding OBV analysis, is that OBV changes precede price changes. The theory is that smart money can be seen flowing
into the security by a rising OBV. When the
public then moves into the security, both the security and the OBV will surge ahead.
If
the security's price movement precedes OBV movement, a "non-confirmation" is
said to have occurred. Non-confirmations can
occur at bull market tops (when the security rises without, or before, the OBV) or at bear
market bottoms (when the security falls without, or before, the OBV).
Chaikin Money Flow
The
interpretation of the Chaikin Money Flow indicator is based on the assumption
that market strength is usually accompanied by prices closing in the upper half
of their daily range with increasing volume. Likewise, market weakness is
usually accompanied by prices closing in the lower half of their daily range
with increasing volume.
If
prices consistently close in the upper half of their daily high/low range on
increased volume, then the indicator will be positive (i.e., above a zero scale
reading). This indicates that the market is strong. Conversely, if prices
consistently close in the lower half of their daily high/low range on increased
volume, then the indicator will be negative (i.e., below the zero line). This
indicates that the market is weak.
The
Chaikin Money Flow indicator provides excellent confirmation signals of moving
average breakouts. For example, if a security's prices have recently penetrated
a downward sloping moving average (signaling a potential trend reversal), you
may want to wait for further confirmation by allowing the Chaikin Money Flow
indicator to cross above the zero line. This may indicate an overall shift from
a downtrend to a new up trend.
A
divergence between the Chaikin Money Flow indicator and prices are also
significant.
For
example, if the most recent peak of the indicator is lower than it's prior peak,
yet prices are continuing upward, this may indicate weakness.
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which is available via Paritech Charts.
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