Tag Archives: technical analysis

Looking for signals: are we living a trend change in Dow Jones?

There have been many comments about the bullish trend in Dow Jones after the election of Donald Trump as US president. The US index reached the maximum 20,000 mark after the Inauguration Day very quickly. The given explanation is that Trump plans and market reaction remembered the first Reagan term in the 1980’s. The current debate is if the bullish trend will keep on or not. There are already pundits that have spoken about a dramatic crash, but in T-Advisor, we prefer to consider figures instead of opinions.

First of all, we have to consider two main points:

  • It is not possible to predict the future.
  • Past performances do not guarantee future ones.

Although they are broadly known, it is useful to remember both, as people take some prospects as immediate reality, but they aren’t.

Let’s look at some technical analysis references in the Dow Jones chart in T-Advisor:

Dow Jones chart in T-Advisor

Technical analysis specialists usually consider that:

  • When two MACD cross from up to down, there is a possibility of negative change of trend. This happened at the beginning of March.
  • When the line crosses a Bollinger Band, investor should look at a repetition of this crossing. If it repeats, there is a possibility of trend change. The first crossing happened some days ago in the lower band.

On the other hand, if we make a bootstrapping analysis of the Dow Jones for the next year, this is the result:

Dow Jones bootstrapping in T-Advisor

The distribution of the possible performance is the following:

Cumulative returns distribution of the Dow Jones for 2017

There is 66% of probability that the Dow Jones close the year with a positive performance. The main result is between -0.4% and 6.4%. Negative results consider 33% of probability from -0.4% and -34%.

Other figures found out in the T-Report of Dow Jones are that the volatility is 9.50%, which is low compared with other indexes and the VaR 1-week is 1.54%, that shows also a low result.

How can we consider these figures? Well, there are some technical signals that might provide the idea that there is a change of trend. The current volatility and VaR shows that the movements are not dramatic in this moment. Finally, the bootstrapping analysis is more biased to a positive result than to a negative one in the next year.

In any case, figures only show probabilities, not certainties. In a short-term vision, following the day-to-day signals is relevant. In our long-term perspective, the relevance of this analysis is relative to the moment in which the investor thinks to rebalance his or her portfolio or decide to change the assets he or she invests in.

What are the main technical models to analyse a share or fund? (Part 1)

Investors have usually two options about how to analyse an asset. These are fundamental and technical analysis. The first one focuses on the company, its balance, its sales and benefits or the market share in its business. The second just look at the share price and its movements, which are organised in patters for them.

The technicians or chartists have developed several measures to take into account when they analyse an asset. These are some of the most important:

Moving average

It is the most usual to analyse a chart. A moving average is the average price of a security over a set amount of time. It removes the effect of the day-to-day fluctuations and allows investors to find the real trend and react to get it or go out from a share. There are several types: simple, linear and exponential, but the SMA or Simple Moving Average is the most common. It can have different periods: 7 days, 50 days, 200 days… For instance, the 200-day-SMA is commonly used to find deep trends and the 7-day-SMA is extended for short-term trends. In T-Advisor, we use a composed SMA by a short-term and a long-term simple averages.

Chart with moving average in T-Advisor

Bollinger bands

These bands developed by John Bollinger place volatility lines above and below a moving average (usually a 20-day-SMA). The more volatility the asset has, the wider are the bands. The usefulness of them is about the signals, when the daily movements cross the upper or lower limits. Investors have to check different patterns to find if the next movement will be upwards or downwards. There are 16 different patterns as the lines cross the upper line as they cross the bottom line. Let’s see an example in T-Advisor.

Chart with Bollinger Bands in T-Advisor

These are some of the technical references that investors use to find out the trend of a security and take their next decisions. You can see more details in all the T-Reports in our database.

T-Report, a high quality asset report as an investment tool

Figures and data are the main tool for investors to obtain good performances, but people don’t need only a collection of numbers, but an interpretation of them. Figures are useful when they are understood and let investors take decisions. In T-Advisor, we care about it with our T-Report, a full and detailed sheet with accurate and relevant data about thousands of assets. Let’s see what an investor may find there with an example: Apple.

First of all, you find the immediate figures about the stock: price, price change, volume, an assessment of the risk taking into account the volatility, the liquidity and our score. T-Advisor has developed its own scoring for all assets to provide investors an understandable way about the quality of them.

After that, you find the historical performance analysis. It is true that past performances do not guarantee future ones, but they show a relevant evolution to assess the interest for your strategy.

T-Report main figures

The following data are related to short-term trend. The system calculates the trend and the cycle phase to perceive if it is the right moment to enter (stay long) or wait, as the position says.

T-Report trend analysis in T-Advisor

Charts are also very relevant to perceive an asset trend. We provide in our T-Report several options to watch the chart and the evolution in the last five years. Anyone who wants to obtain deeper information may click on “View charts in charting area”.

T-Report charts in T-Advisor

Comparative tables are also useful to evaluate data. That is why we show the cumulative performance and different views from different technical models.

T-Report technical analysis in T-Advisor

Similarly, every T-Report compares the asset with the index reference to check if it performs better or worse. It also shows relevant figures as alpha and beta. It is to underline that the T-Report is full of hints that explain the meaning of all the data just locating the cursor on them.

T-Report risk and index comparison

In T-Advisor we consider that capital preservation is the main goal for an investor. The chapter devoted to risks analysis is wide, because we want to report properly about them to help investors preserve their capital. Volatility, VaR and retracement are the main figures. We also include a comparative chart that links performances and volatility from the assets and several indexes.

T-Report risk analysis in T-Advisor

Finally, if you are not satisfied, T-Report shows investment alternatives ranked by exchange and sector, so that you can find the one that fits your interests.

T-Report investment alternatives in T-Advisor

To sum up, investing is not a game. It requires time to analyze where we are going to allocate our money. Information is a main stuff to assess options and take decisions, but this information has to be properly and systematically organized. Our T-Report is the answer for these needs.

 

Technical analysis: a picture speaks a thousand words

The schools in finances, if we may speak about them, are two: fundamentalists and chartists or technicians. Both are quite different when they analyze and prospect market trends. Fundamentalists look into the conditions that produce a given price in a moment (for instance, interest rates for currencies or balance sheets in companies). On the contrary, technicians just consider the price without any economic or accounting figure and research into the trends of the pricing line in a chart.

Let’s look this example extracted from the T-Advisor app. If we select a listed item (in this case, Bank of America), we can choose different indicators from the software.

Selecting technical analysis figures from T-Advisor app

An example resulted from the selection of some indicators show us the following chart:

Technical Analysis Chart from T-Advisor app

In this chart we selected the pricing line since 2001 and the trending lines SMA (Simple Moving Average) for 20, 70 and 200 days. These lines let the investor or the advisor have the perception of how the price of this company is moving in the market.

What are the main advantages of technical analysis? Actually, this concept focuses just on price. So, as particular investors, we do not need to know deeply about economics. Secondly, charts give us easily and quickly the trend (upwards, downwards, sideways). Thirdly, we discover patterns, as technicians think that market actions repeat. Of course, they are not necessary easy to discover, but they exist. Finally, charts provide the investor a wealth of information just with an image and the right software.

Technical analysis has jumped with the development of computing and software tools based on this concept are a great help to success in the finance markets. Last, but not least, technical analysis is applicable to all kind of tradable products: stocks, bonds, currencies or commodities.

Are you new in finances? Do you want to learn more about technical analysis? This blog will publish regularly posts about the main concepts and vocabulary linked to it.

Do you dare to improve your investment performance with T-Advisor?

10 advantages of T-Advisor: performance improvement

T-Advisor, the advance suite to manage investment portfolios, intends to provide its advantages to the widest range of investors and financial advisors. Our tool was designed thinking about the individuals’ needs and the most possible easiness to use it, so that nobody could feel excluded from finance managing.

Our next step: we invite you to trial T-Advisor free for three months with access to the whole premium package. We are sure that this period to trial T-Advisor will convince you about the usefulness and usability of it. T-Advisor will become an essential software to manage your portfolios. After these three months, you will keep enjoying the tool just for 20 euros each month.

T-Advisor is full of interesting functionalities to help you decide the best investment to outperform the market. When we designed T-Advisor, we were sure that our strength had to be information, figures, data and charts. But these contents are useless, if they are not correctly organised. T-Advisor offers full reports with graphs from your positions and portfolios to learn from the data your next steps.

Risks, volatility, liquidity will be under your control with T-Advisor. Recommendations and continuous news feed are also available. And last, but not least: we are confident in the technical analysis and Quant portfolios as powerful tools to take the right decision just with a clear target: improve your wealth.

Visit our website to get more information about the whole details of T-Advisor and try it free for three months with all the premium services. T-Advisor is also available for mobile in Android, iOS and Windows 8 systems. Do dare it!

Investment Ideas: Satorius AG

Each week we will post a suggestion to be considered if you are looking for good investment ideas and stocks to watch.

Do not miss it, for this week we have: Satorius AG

Sartorius is one of the world’s leading providers of laboratory and process technologies and equipment. It’s key customers are from the biotech, pharma and food industries, as well as from public research institutes and laboratories. Sartorius operates its own production facilities in Europe, Asia and America, and also has sales offices and local representatives in more than 110 countries.

t report sartorius ag

sartorius trend analysis

charting sartoriusperformance sartorius agsartorius ag relative performance