Technical Analysis User Guide: August 2010

Technical Analysis User Guide
August 2010
Table of Contents
Table of Contents .........................................................................................................2 Technical Analysis.........................................................................................................3 Introduction ..............................................................................................................3 A. File Options .....................................................................................................5 B. Scrolling Text Message Area ..............................................................................6 C. Chart Types .....................................................................................................6 D. Chart by Timescale View ...................................................................................8 E. Chart Magnifier ................................................................................................9 F. Adjust Price .....................................................................................................9 G. Chart View Layout ............................................................................................9 H. Trading Options.............................................................................................. 11 I. Drawing & Annotation Tools ............................................................................. 12 J. Technical Indicators ........................................................................................ 13
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Technical Analysis
Maybank Group is pleased to provide you, Technical Analysis, another valued added service which will facilitate you in making the best investment decisions. It is a method of evaluating securities by analyzing trading statistics generated by market activity, such as past prices and volume. In Technical analysis, it is not about the security's intrinsic value of a company or a commodity but instead charts and other tools are used to identify patterns that can suggest future trading activity. It is our hope that you will make full use of the facility given based on the guidelines listed below.
Introduction
The figure below is the overall functions and views of the Technical Analysis screen. As explained, below are the descriptions related to this screen beginning with chart viewing selection followed by each of the labelled items.
C D F G H
Scrolling Text Message area Scrolling Text Message area Scrolling Text Me
A
J 3
Item 1 2 3 A
Description
Original chart displayed once any stock is selected for Technical Analysis An example of OBV option selected from Technical Indicator tools Stochastic %K and %D option selected from Technical Indicator tools File Options
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B C D E F G H I J
Scrolling Text Area Message Chart Types Chart by Time Scale View Chart Magnifier Adjust Price Chart View Layout Trading Options Drawing & Annotation Tools Technical Indicators
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A.
File Options
You can use two available selections in order to open existing .dat format file, or to save your current viewing. To open existing .dat format file: From the menu bar, click the Open Folder icon as shown in the next figure.
Locate the existing file location. Click Open. For example, see next figure. Once Ramunia.dat file is opened, it will replace current chart view.
To save the current chart view or analyzed results: From the menu bar, click the Save File icon as shown in the next figure.
Type in the File Name or select from File Name list based on previous file name used. Select from Save as type (default is as *.dat). Click Save when done.
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B.
Scrolling Text Message Area
This area is for the purpose to display important messages or announcements from Maybank.
C.
Chart Types
Consist of three charts viewing types that are Bar Chart, Line Chart and Candlestick Chart. Viewing Different Chart Types Clicking any of the icons from this group will change the displays of the chart of current window.
Bar Chart
Bar Chart graphs the open, high, low, and last prices for a specific trading session over a given period of time. To view chart in Bar Chart format: From the menu bar, click the Bar Chart icon as shown in the next figure.
Current window will display chart in a bar chart format.
the
Line Chart
Line Chart represents only the closing prices over a set period of time. The line is formed by connecting the closing prices over the time frame. To view chart in Line Chart format: From the menu bar, click the Line Chart icon as shown in the next figure.
Current window will display the chart in line chart format.
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Candlestick Chart Candlestick charts provide a quick visual picture of the relationship between opening and closing prices and their relative strengths or weaknesses, especially for extended periods. To view chart in Candlestick Chart format: From the menu bar, click the Candlestick Chart icon as shown in the next figure.
Current window will display the chart in a Candlestick chart format.
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D.
Chart by Timescale View
Consists of 6 types chart viewing based on timescale starting from daily (today), weekly (till today), monthly (till today), hourly (one hour), 15 minutes and as detailed down as 5 minutes. Next, is the example if you select Weekly Chart view. To view weekly (including todays) chart: From the menu bar, click the Weekly Chart icon as shown in the next figure.
Week A
Notice that each bar represents their respective week. Written date is every Monday of the week. For example, Week A begins on 6 November 2006 while week after, Week B began on 13 November 2006.
Week A
Week B
Week B
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E.
Chart Magnifier
Allows you to zoom in (enlarge) and zoom out (reduce) the size of the chart. It also provides a zoom plus option for specific area.
Next figure shows how the Zoom Plus magnifier functions.
Enlarged zoom result
Selected zoom area
Point to your preferred area for which the Zoom Plus magnifier should apply on.
F.
Adjust Price
This option enables users to make adjustment to the preferred stocks price. Normally, stocks which have Corporate Action issues will be have price adjustment.
G.
Chart View Layout
The view layout enables users to view different indicator on a different page. Advanced user has six views to choose from while standard user has only two. The last layout will be used for comparison between Stock and Index (for advanced user). You will know you are at which view from looking at the bigger and Cyan in colour of the layout digits selection. To select view layout format, click on any 6 digit numbers displayed. Default layout is layout no. 1. Note: Standard users will be configured with 2 layouts that are layout 1 & 2.
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Selected layout is layout item no. 1.
from
For example, selected layout is layout number 1.
Selecting Layout number 6 will bring you to index/stock comparison view. At the below area of the layout, you may click on the Index/Stock name in order to compare with other indices/stocks.
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Selected layout is from
Scrolling Text Message area Scrolling Text MessagelayoutScrolling Text Me area item no. 6.
1 2
Select Type from 1 and then select Indices or Stock name from list in 2 current selection is from Indices Type named FBM KLCI.
. For example,
H.
Trading Options
Consist of online Buy and Sell options for you to choose once you are satisfied with the analysis performed for the selected stock.
Click Buy to proceed with buying of the selected stock
Click Sell to proceed with selling of the selected stock
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I.
Drawing & Annotation Tools
On the left panel of the Technical Analysis window is the Drawing & Annotation Tools. It consists of Fibonacci style chart drawing tools such as Fibonacci Retracements, Fibonacci Fans, Fibonacci Time Zones and also regular drawing tools such as Trend and Horizontal Lines, Ellipses, Text Notes and etc. Just click any of these tools and then drag it on the chart to view the results.
Fibonacci
Leonardo Fibonacci was a thirteenth-century Italian mathematician who discovered the significance and unique properties of a simple number series, in which each numeral is added to the previous to create the next one in the series: 0, 1, 1, 2, 3, 5, 8, 13, 21, etc. Fibonacci numbers, and more significantly the ratio of those numbers to each other, can be found throughout nature and cycles. Fibonacci ratios are used in technical analysis to predict retracement areas during pullbacks, as well as targets, called extensions, for projected price moves. Fibonacci Retracements Fibonacci Time Zones Fibonacci Fans Fibonacci Arc
Basic Drawing Tools
Linear Regression Line
Erase All
Fibonacci Retracements
Horizontal line that divide the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 50%, 61.8% and 100%.
Fibonacci Time Zones
A series of vertical lines that correspond to the sequence of numbers known as Fibonacci numbers. Fibonacci numbers are a sequence of numbers where each successive number is the sum of the two previous numbers.
Linear Regression Line
A Linear Regression Line is a straight line that best fits the prices between a starting price point and an ending price point. The Linear Regression Line is mainly used to determine trend direction.
Fibonacci Fans
Fan lines that divide the vertical distance by the key Fibonacci ratios of 23.6%, 38.2%, 61.8% and 100%.
Fibonacci Arc
Curve lines that intersect trend line at the key Fibonacci levels of 23.6%, 38.2% and 61.8%.
Basic Drawing Tools
Consist of horizontal and vertical line, ellipse, linear line, font, up and down arrows and also square shape
Erase All
To remove all the previously inserted drawing tools
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Technical Indicators
These indicators will provide a more detail analysis technically where it will involve mathematical calculation and scientific formula calculation. Currently there are 11 options available namely as SMA (Simple Moving Average), EMA (Exponential Moving Average), MACD / MACD Histogram, RSI, Stochastic, OBV, Bollinger Bands, Volume and Parabolic. The RSI and Volume are set as default Technical Indicators for selected chart that you choose to analyze.
Simple Moving Average 1& 2 Bollinger Bands MACD RSI Volume
Exponential Moving Average 1& 2 Parabolic KD (Stochastic) OBV Indicator Settings
Simple Moving Average
A simple, or arithmetic, moving average that is calculated by adding the closing price of the security for a number of time periods and then dividing this total by the number of time periods. In other words, this is the average stock price over a certain period of time.
Bollinger Bands
An indicator used to compare volatility and relative price levels over a specified time period. Three bands are plotted: a simple moving average, an upper band of the simple moving average plus two standard deviations, and a lower band of the simple moving average minus two standard deviations. When the markets become more volatile, the bands widen, or move farther away from the average. When the markets are less volatile, the bands contract, or move closer to the average.
MACD
MACD analysis uses three moving averages, often exponential. Two of them are based on the number of price periods used and the third is an average of the difference between the two moving averages. The difference between the readings of the two moving averages is usually shown as a histogram, while the average of that difference is shown as a moving average line plotted on top of the histogram. An important part of MACD analysis is how its movements compare with price movements to determine strength or weakness in the market.
RSI
A technical momentum indicator that compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. It compares periods with up closes with periods that have down closes to produce an index reading reflecting the strength of price changes on a scale of 0 to 100. It is an indicator that shows overbought or oversold technical conditions.
Volume
The number of shares or contracts traded in a security or an entire market during a given period of time. Volume is an important indicator in technical analysis as it is used as a guide to identify market activity for a stock or index as to whether it shows supply or demand.
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Exponential Moving Average
A type of moving average that is similar to a simple moving average, except that more weight is given to the latest data. This type of moving average reacts faster to recent price changes than a simple moving average. The 12- and 26-day EMAs are the most popular short-term averages, and they are used to create indicators like the moving average convergence divergence (MACD) and the percentage price oscillator (PPO).
Drawing & Annotation Eraser
To remove the previously inserted drawing tools.

Parabolic
A technical analysis strategy that uses trailing stops and a reverse method called stop-andreversal (SAR) to pinpoint entry and exit points.
KD (Stochastic)
A technical momentum indicator that compares a security's closing price to its price range over a given time period. Stochastics measures the closing price relative to the low of the range for a selected period to indicate rising or falling momentum, providing trading buy (or sell) signals when its lines cross into overbought or oversold territory.
OBV
A method used in technical analysis to detect momentum, the calculation of which relates volume to price change. OBV provides a running total of volume and shows whether this volume is flowing in or out of a given security. OBV attempts to detect when a financial instrument (stock, bond, etc.) is being accumulated by a large number of buyers or sold by many sellers.
Indicator Settings
Parameter settings for technical indicators.
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