We have added a new charting feature to our candlestick charts, available to all users, that we think you are going to like. With Candlestick Charts you now have the ability to specify weekly or monthly candlesticks in addition to the daily candlesticks that have always been there. This brief blog post discusses why you might find this new feature useful.
First things first. When charting, you get this new feature by selecting from the new sub menu off of the Candlestick menu as shown below.
So, what exactly is the benefit of weekly and monthly candlesticks?
Well, if you are using wider time periods, the weekly or monthly candlesticks can really smooth out short term moves and show you what is happening on a longer term basis with much less noise. Let’s look at an example and see.
Below is a daily candlestick chart of Visa (V), over the last year. You can discern a general uptrend, but with lots of big down days. Some of the down days are all in a row, especially in the period from October 1st to October 11th and then again in the month of December. If you owned the stock and were experiencing this E ticket ride, it would be pretty uncomfortable, and you may question the wisdom of holding such a stock in your portfolio.
However when you widen the time frame to weekly and switch to a two year candlestick chart (shown below), you notice that there are still a couple of periods of volatility, but taking the long term views, the majority of the performance of the stock is steady and upward trending. You also notice that the volatility period in January of 2018 has both up and down periods which mostly cancel out, and overall the period is only slightly down.
The more volatile period starting on October 1st of 2018 and continuing though the end of the year was worse. But it did end with a sharp weekly recovery. In any case the performance of Visa in that period looks far less scary in the weekly chart below vs. the daily chart above.
If you want to feel even better about the stock, switch to a monthly candlestick chart and a five year period. With the monthly candlestick chart, you can see that Visa is a really solid long term holding and that E ticket ride it sometimes gives is well worth it in the long run.
We hope you will check out the new weekly and monthly candlestick charting features. They can definitely give you some great perspective on your holdings when you vary the time period of the candlesticks and the time period of the chart.