CHARTWATCHCENTRAL.COM
CHARTWATCHCENTRAL.COM
Christina Nikolov, founder of ChartWatchCentral.com, sent me an e-mail in February 2002 about a double top in Apple Computers (AAPL) that I had written about for Traders.com Advantage. The double top looked as though it was turning into a head and shoulders top, but ended up just turning into a renewed advance. Maybe it was her combination of admonishment ("heavier volume on the second rally ... should be lighter on the second peak") and encouragement ("I think that you have the right idea ... it is likely that the current level will be a topping pattern"), but I thought I'd take her advice when she suggested I visit her website, ChartWatchCentral.com, where, she said, 29 different stocks with intriguing chart patterns awaited my attention.
Figure 1: ChartWatchCentral.com. At ChartWatchCentral.com, 29 different stocks with intriguing chart patterns await your attention. Support and resistance areas are clearly marked on easy-to-read (and enlargeable) MetaStock charts, as well as major moving averages (50-day and 200-day) and chart patterns (if any) that look to be developing. It's a good place to get trading ideas.
I've been impressed with ChartWatchCentral.com ever since. Nikolov's
site doesn't have the commentaries and analyses from investment bankers
and mutual fund managers that characterize some financial websites. Nor
does it try to be a one-stop technical analysis shop with customizable
charts and dizzying arrays of indicators and oscillators, stock screeners,
and so on. But ChartWatchCentral.com should be in just about every trader's
"Bookmarks" list simply because of its dozens of different stocks
with interesting chart patterns.
"When it comes to trading," says Nikolov, "users would be
best served if they use my ideas as a starting point ... I would urge
users not to follow a recommendation of mine unless my reasons make sense
to them."
One of the things about ChartWatchCentral.com that should prove especially beneficial to visitors is the consistency of the charts and commentary. With support and resistance areas clearly marked on easy-to-read (and enlargeable) MetaStock charts, as well as major moving averages (50-day and 200-day) and chart patterns (if any) that look to be developing, ChartWatchCentral.com helps new and intermediate-level traders and investors develop and maintain a consistent approach to looking at the markets. Too often, novice traders find themselves choosing between different ways of drawing trendlines, different moving averages' lengths and styles, and any number of strange or exotic indicators and oscillators when they first begin looking at the markets. While this is understandable, serious new traders need to avoid the trap of becoming "moon-eyed" by the variety of tools available to them. ChartWatchCentral.com is a positive reminder that simple technical analysis techniques (and the occasional fundamental observation) work just as well as many of the most highfalutin' statistical approaches.
Nikolov adds: "The most unique attribute of ChartWatchCentral is the anticipation of reversals. While many other sites look at already established trends, my site goes out on a limb and actually anticipates a directional change before it occurs ... While this is obviously more risky ... it can also prove more profitable if the reversal takes place near the price that I predict."
Nikolov first developed an interest in the stock market when she was a teenager, following various stocks as part of a high school project. Although other interests took her away from the markets for a few years, she always kept abreast of how the markets were moving. But it wasn't until she stumbled upon a segment on technical analysis by John Murphy that her youthful interest in stocks became a real opportunity for an ambitious adult. Months of hand-charting stock prices and volumes only fueled her passion for the stock market, and with technical analysis providing a way for her to take advantage of her stock convictions, there was no looking back.
INDEXWATCH AND STOCKWATCH
ChartWatchCentral.com's IndexWatch is one of the most worthwhile pages on the site. IndexWatch features MetaStock charts and commentary from Christina Nikolov herself. Here, as opposed to StockWatch, the commentary tends more toward the technical, with discussion of support and resistance levels, retracement areas, the development of common chart patterns, and readings from various moving averages. The main stock averages are all included here: the utilities, industrials, and transports from the Dow Jones indexes; the Standard & Poor's 500; the US Dollar Index; and the Nasdaq. Other indexes are included that may be somewhat less common, such as the Mexico Index, the Wilshire 5000, and a variety of small-cap stock indexes.
Nikolov's StockWatch section will be of particular interest to intermediate-term stock traders and investors. Presenting each stock in a 12-month time frame, Nikolov provides commentary that is helpful for both longer- and shorter-term investors and traders. Each of the charts enlarges to a full-sized MetaStock chart with resistance and support areas indicated and notes on specific chart patterns (double tops, head and shoulders bottoms) that may be developing.
Chartwatchcentral.com's education page is still under construction; however, the page already features a chart-pattern database filled with real-life examples of head and shoulders tops and bottoms, double and triple tops, and so on. The archives section is also a worthwhile page to browse through, particularly for those new to ChartWatchCentral.com, technical analysis, or both. Here, previous IndexWatch-related commentary going back to May 2001 is available so that those interested can go back and read Nikolov's thinking at such significant market turns as the end of September market plunge and the rally that began immediately afterward.
How can users best take advantage of what ChartWatchCentral has to offer? Nikolov suggests that users register for e-mail updates. "At this point," she notes, "the website is updated only when events warrant a change. By signing up for updates, registered users will be notified only when an update is posted." Indeed, not only does ChartWatchCentral provide e-mail updates about new stocks with interesting patterns, but also descriptions of site improvements, from making the archives section more user-friendly to adding a new index to the IndexWatch page.
Although already a site worth browsing, ChartWatchCentral is still in many ways a work in progress as founder Nikolov seeks out more ways to make it even more valuable for visitors. But this value probably won't stay free for long. "Currently, the website is free," she says, but "plans are under way to eventually convert most, if not all, of the website into a paid service later this year."
David Penn is a Staff Writer for Stocks & Commodities.
OPTIONETICS.COM
OPTIONETICS.COM
At your first glance, the Optionetics homepage may leave you baffled as you look for a place to start. After navigating a little, I think the best place to begin is the Daily Need To Know section. This section contains easy-to-read articles covering topics from trading strategies to tax tips. This is the kind of educational content that gives the website its strength.
Optionetics focuses on low-risk strategies and the importance of hedging positions. The site discusses several delta-neutral strategies that will minimize risks and maximize profits. Most of the strategies discussed on the site will work well in any market, regardless of the direction.
Figure 1: Optionetics.com
If you're new to options trading, the Trading Education link on the left-hand column of the homepage leads to articles on trading options. These cover basic options concepts, advanced options concepts, and bullish and bearish strategies. This section makes Optionetics a site that both beginning options traders and seasoned traders looking for new strategies can lean on for guidance.
Other tools you can find on the site include charts, volatility rankings, and discussion boards. The charts can be customized by your choice of indicators, and overlays are limited. The volatility rankings are divided into different categories - expensive, cheap, explosive, quiet, breakout high, breakout low, highest volume, highest open, call top price percent increase, call bottom price percent decrease, put top percent price increase, and put bottom price percent decrease.
The message boards seem to be active, with traders discussing various techniques such as straddles, spreads, and other advanced trading strategies. The options brokers discussion board is one of the most active. Optionetics.com appears to have attracted a large following of options traders.
These services are free. You can get even more by signing up for the Platinum service, which costs $70-100 per month. This upgraded service includes:
End-of-day options price, volume, and open interest End-of-day options greeks for all puts and calls Ability to create and save options and stock trades online Implied and historical volatility, IV skew, and put/call ratio charts Options portfolio tracking and profit-loss calculations Stock-ranking tools Option-search tools Backtesting of all trades and built-in functions More sophisticated charting capabilities
All in all, Optionetics.com is a comprehensive site for the off-floor options trader. Its developers have done a good job of simplifying complex options trading strategies so that they're understandable even to the novice options trader.
-- Jayanthi Gopalakrishnan, Editor
Originally published in the May 2002 issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights reserved. © Copyright 2002, Technical Analysis, Inc.