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Analog Charts
Analog Charts answer the question "What's happened in the past to this stock when its chart looks the way it does now?" It finds the five best-matching periods in the security's history.
How does it work?
Each week on Sunday we examine recent price action for actively traded stocks, searching for periods in its history which correlate highly with the recent movements. When prior historical periods are found that match, we overlay a plot of the current price action in blue on top of a chart of the historical period. The historical price movements then become a roadmap for where they stock may go in the future, if history repeats itself.
Specifically, the search looks at the last 65 trading days in the security's history. The correlation must exceed 90% to generate a match and only the top five matching charts are
displayed.
The chart shows the most recent 65-day bars of data for the security on the left-hand side of the chart. The most recent trading day is indicated with the red vertical line. This corresponds to the date in the historical match period where the strongest correlation was found and the historical period, which shows the 65 trading days leading up to the match date, and the 65 trading days afterwards, is plotted with black bars.
The black bars to the right of the red line indicate how the stock has performed after the pattern of the current period has occurred in the past.
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