5charts.com gives you the power of 5 powerful stock indicators in simple, exportable and interactive stock charts. Below you will see examples of a candlestick (with Bollinger Bands), Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), Aroon Indicator and Chaikin Volatility Charts. These charts are consistent for FAANG, DJIA and recent most actives.
Daily close price movements are captured in a candlestick chart. For each candle the opening price, closing price, high and low are displayed. When the closing price is higher than the opening price, known as “bullish candlesticks”, the candles are green. Conversely then the closing price is lower than the opening price the candle is red and called “bearish candles.” Within the day, the high price is represented as the stick emerging upward from the candle body. Similarly, the low price for each day is shown as another line extending downward from the candle body.
The candlestick chart also contains Bollinger bands. The high, middle and low bands help determine oversold or overbought volatility. 20 day historical volatility is used to calculate the middle band while the upper and lower bands are 2 standard deviations from this moving statistic. The width of the band is determined by volatility at that time, with wider bands demonstrating higher volatility and the converse is true.
Next, 5charts.com charts the Relative Strength Index or RSI and moving average convergence divergence, MACD.
The RSI is a momentum oscillator. It provides an index between 0 and 100. The RSI compared average gains and losses in the last 14 trading periods. The relative stregnth is the avg gain / avg loss in the moving period (14 days). This value is indexed with a simple calculation 100 - (100/1+RS). The RSI is used to understand overbought and over sold situations visualized as a control chart. Here the standard in-control values are 70/30.
The MACD requires three moving addresses. nFast is a moving average over 12 trading periods. nSlow is a longer winder using 26 periods. Finally the signal line is the moving average of these two values. By measuring the moving average of two moving averages with different time frames, an investor hopes to capture when momentum is building or receding.
AROON is charted as an “up” and “down” line. Up line values are calculated (on a percentage basis) with the number of periods since an instrument’s price recorded a 20-day highest price. The down line is calculated with the number of periods since an 20-day lowest price. The lines fluctuate within the range from 0 through 100. Immediately after a new 20-day highest or lowest price is reached, AROON registers its maximum value and the corresponding (Up or Down line) surges to 100. The line declines as the elapsed number of periods since the new highest or lowest price increases. It reaches 0 when the elapsed number of periods is 20.
The Chaikin Volatility measures the exponential average daily range (High – Low) of a stock over 10 trading days. The Chaikin Volatility Indicator is plotted as the difference between the 10 day average range and average range 10 days ago.
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