Dominate the Markets with Smart Technical Analysis | TA 101 – Part 17
Smart Technical Analysis Comparison Charting
Comparison charting allows the analyst to study individual price performance and performance relative to other stocks. Comparison charts are a big part of the market analysis that expert StockCharts.com market commentator John Murphy uses.
Individual Price Performance
The SharpChart above demonstrates how the Performance plotting style can be utilized to track the Dow Jones Industrial Average’s year-to-date performance. Once this chart is generated, the page can be bookmarked as a favorite in your browser for quick access in the future.
Multiple symbols can be plotted and compared in this manner by using the Price indicator and other ticker symbols as parameters with a Behind Price position setting. The SharpChart above shows the performance of AA compared with BA and IBM.
Relative Performance Comparison
The SharpChart above illustrates how the performance between Boeing (BA) and the Dow Jones Industrial Average (DJIA) index can be compared in the Indicator Panel above the Price Plot Area. On the workbench, select Price as an indicator and enter BA:$INDU as a parameter to display the relative performance indicator. A positive slope of the indicator line shows that the first symbol in the ratio is outperforming the second symbol. A negative slope indicates the opposite; the first ticker symbol is underperforming the second ticker symbol. Additionally, a flat line indicates that the performance of both symbols is comparable. There are many ways to use this information. In the case of comparing a stock to a market index, the analyst can quickly determine whether or not a stock is outperforming the market. When comparing two stocks, the analyst can quickly ascertain their performance in relation to one another.
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