HHow to interpret using the composite chart / composite view method when doing technical analysis? We are trying to explain it briefly. You can learn how to create a composite chart with a practical example.
We generally call the results we obtain by the methods we use to predict future prices when buying or selling a stock technical analysis. Technical analysis We see that there are many different methods of doing this. One of these is known as the composite view.
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What is Composite Chart in Stock Analysis?
In stock technical analysis, we can say that the composite chart, in other words, the composite view, is simply the interpretation of the movement of a stock relative to the index. This is the method we try to analyze what movements the stock is making relative to the index.
How to Draw a Composite Chart in Stock Technical Analysis?
First of all, we need to use a tool to create charts for composite technical analysis. In our example we will use the TradingView tool. We choose it because it is plain, simple and understandable.
We create our charts via TradingView. You can also follow the link TradingViewYou can become a member at a discount.
First Step Stock Selection
For the sample study we will create with TradingView first our share We choose. For this example we Koç Holding i.e. KCHOL We choose the stock.
In the Symbol Search Section, we write the name of the stock we want to look at as a composite, add “/” and write XU100 next to it. After typing it, we confirm it with enter and we open the stock chart. Example: BIST:KCHOL/BIST:XU100
Second step Evaluation According to Index
After this process, the chart opened, but there is no chart to see the comparison. This to create the chart again symbol search We open the section and the expression to the end *Current index value We add. We confirm by pressing enter. So, in our example, the text on the symbol search screen looks like this; BIST:KCHOL/BIST:XU100*7913.76
As you can see in the image below, our ruler on the right, where we can monitor certain ratios, has arrived in a meaningful way.
Step Three: Using Analysis Method
After creating the chart of the stock, from its peak 0.33, 0.5, 0.618, 0.685, 0.75 and 1 We create a Fibonacci correction that includes the levels. Here you can try and change your own levels. You can use not only Fibonacci but also different analysis methods.
Interpretation
Yukarıda gördüğünüz üzere hisse destek çizgisinin üstünde seyrediyor. Ancak endeksin güncel değerine göre ise %50’nin (0.5) altında görünüyor. Altta tepki alabileceği destek noktalarını görebiliyoruz. Hisse bu noktada alım satım işlemleri için henüz takip gerektiren bir pozisyonda.
What Do Ratios in Stock Composite Analysis Mean?
The ratios on the right side of the chart show the stock's performance relative to the index as a percentage and help us understand whether the stock is strong or weak.
Using Different Interpretations / Indicators in Composite View
Experts, whom we call experts, are much more careful when making these comments. indicator can use it. It may not be right to trade based on this analysis alone. Therefore, it would be beneficial to move forward by confirming more indicators.
Different Examples
We have previously applied composite analysis in some analyzes we published on our website. You can check out some of these. Here you can also see the use of different indicators and levels.
AKGRT Technical Analysis Example
Konya Paper – KONKA Technical Analysis Example
SAHOL Technical Analysis Example
To access more examples, you can review the contents by searching for the word composite in the search section. Additionally, if you want to evaluate the formations, you can also visit the educational information section. our content you can review.
What are the Most Used Methods of Technical Analysis?
- Chart Patterns: These are formations defined by price movements forming certain patterns. For example, formations such as “reverse head and shoulders” formation, “triple top” or “triple bottom” are included in this category.
- Technical Indicators: They are mathematical formulas used to calculate and visualize price movements. For example, moving averages, RSI (Relative Strength Index), MACD (Moving Average Convergence Divergence) and Stochastic Oscillator fall into this category.
- Volume Analysis: It monitors the change in trading volume along with price movements. It evaluates volume changes to support or counter price movements.
- Trend Analysis: It is used to determine in which direction the price is moving. It is used to identify current trends and predict possible future trends with tools such as trend lines and channels.
- Support and Resistance Levels: These are the points where the price tends to get stuck or turn around at certain levels. These levels can halt or reverse price movements.
- Fibonacci Retracement Levels: Using the Fibonacci sequence of numbers to predict potential levels to which the price may correct. These levels are often considered support and resistance levels.
Frequently asked Questions
What is Composite Chart in Stock Analysis?
It is a method of analyzing the movement of a stock relative to the index. As an example, we consider KCHOL stock in our content.
How to Draw a Stock Composite Analysis Chart?
In our content, we tried to explain how to draw a graph with a sample application, starting from which tools to use.
Which Levels Are Important in Composite Analysis?
You can determine your own levels with the Fibonacci Retracement on the composite chart. Levels such as 0.33, 0.5, 0.618, 0.685 can give good results.
Does It Work Alone?
No. The composite view only shows the stock's position relative to the index. It is necessary to analyze this position using different indicators. You can check our example.
If there is information that you think is incorrect, please mention it in the comments.
Our posts are not investment advice. Our disclaimer you can review.
