Monthly Stock Chart View and Technical Analysis For Precision Castparts (ticker_PCP)

The monthly stock chart view is intended to help uncover the long term historical price trend for this particular stock and to determine its long term investment prospect. Although the main goal is to trade options and not to trade the underlying stock, it is insightful to understand where the stock has been in the last ten years. More importantly, the long term charting helps to identify the personality of the underlying stock, in order to assign and validate the proper indicators to the stock. The chart indicators to be used as technical studies for the monthly template are combined into 4 sub-charts as illustrated in the following plot.

The upper-most chart shown above contains 50-day and 200-day simple moving averages (SMA)to help determine if the long term trend is bullish or bearish. It also contains a set of bollinger bands to show the volatility of the stock over its long term interval. The price bars are shown as color-coded candlesticks to reflect either a down-trending month (RED) or up-trending month (GREEN)

The second chart from the top contains the moving average divergence convergence (MACD) line , in addition to the MACD signal and the MACD histogram. The crossing of the MACD line with respect to the MACD signal will typically indicate a confirmation of the existing trend of a stock.

The third chart from the top contains the money flow indicator and the associated money flow index (MFI).

The bottom chart contains the traded volume per month, in addition to the average volume line calculated over the period of 10 years. For more on chart pattern recognition and technical analysis refer to the Trend Strategist Handbook by Price Headley.