Chaikin Stock Research

Chaikin Analytics
Industry Financial Markets
Predecessor Chaikin Stock Research
Founder Marc Chaikin
Headquarters Philadelphia
Website Homepage

Chaikin Analytics (formerly Chaikin Stock Research) is a company founded by Marc Chaikin that produces tools utilized by individuals in the financial markets industry based upon Chaikin Indicators.

Chaikin Indicators

Chaikin Analytics, a Philadelphia stock market analytics firm, produces Chaikin Power Tools for individuals and Chaikin Analytics | Professionals.[1] The firm was founded by its namesake Marc Chaikin, who spent over forty years developing stock market tools for institutional investors. The tools utilize algorithms to estimate the future direction of stock prices for individual investments, distributed via desktop and app models.

Chaikin Oscillator

The Chaikin Oscillator was developed in the 1970s.[2] The indicator is based upon the momentum of the Accumulation/Distribution (AD).[3] AD calculates the position of a stock's daily closing price as a fraction of the daily price range of the stock—a fraction that is multiplied by the daily volume in order to quantify the net accumulation or distribution of a stock. AD is expressed mathematically as:

AD = cum\frac{(C - L) - (H - C)}{(H - L)}\times V\!\,

where "AD" represents the Accumulation/Distribution cumulative total running line, "cum" is an instructive abbreviation meaning "calculate a cumulative total running line", "C" is the daily closing price, "H" is the daily high price, "L" is the daily low price, and "V" is the daily total volume.

The Chaikin Oscillator is then measured as the difference between the 3-day exponential moving average (EMA) of the AD to the 10-day EMA of the AD.[4][5] Chaikin Oscillator signals are made when crossing above or below the zero line or when bullish/bearish departures take place. These signals anticipate the change in direction of the AD. Stock Analysts will observe a Chaikin Oscillator graph to look for the signal to buy or sell a stock.[6]

Chaikin Money Flow

Chaikin Money Flow (also referred to as CMF) measures Money Flow Volume over a period, typically 20 or 21 days.[4] The indicator oscillates above and below the zero line which indicates a bullish or bearish trend.[7] Money Flow Volume is also used to calculate Chaikin’s Accumulation/Distribution (AD).[8]

Chaikin Money Flow is an oscillator based on the concept that that buying support is normally demonstrated by increased volume and repeated closes in the top half of the daily range and that selling pressure is shown by increased volume and recurrent closes in the lower half of the daily range. Rising prices typically accompany buying support and decreasing prices usually occur with selling pressure. The end result is a picture of how money is flowing into or out of a stock.[9][10]

To determine the CMF one must first determine the Close Location Value (CLV) as follows:

CLV = \frac{(close_{1} - low_{1}) - (high_{1} - close_{1})}{(high_{1} - low_{1})}\!\,

The next step is to take the CLV and determine the CMF, as follows:[10]

CMF = \frac{\sum_{t=20}^tCLV_{t} \times volume_{t}}{\sum_{t=20}^t(vol_{t})}\!\,

Chaikin Analytics

Chaikin Analytics is a suite of cutting edge analytics that combine fundamental and technical indicators with proprietary analytics in easy-to-use desktop or iPad applications. The proprietary Chaikin Power Gauge Rating analyzes 5,000 stocks using a 20 factor model. The tools were created by Stock Analyst Marc Chaikin and are produced by his company Chaikin Analytics. Chaikin Power Tools were developed for self-directed investors in order to provide them with access to information generally available only to institutional investors.[11] Chaikin Analytics | Professionals was developed for traders and professionals, as well as experienced individuals.

The Chaikin Power Gauge Rating uses a basic color scale to inform investors of the investment potential of a stock: red shows that a stock is bearish, yellow shows that a stock has a neutral rating, and green shows that a stock is bullish.[12] The 20 factors which make up the rating are organized into four categories: financial metrics, earnings performance, price-volume activity, and expert opinions. One of the factors in the rating is Chaikin Money Flow (CMF). The Chaikin Power Gauge was back-tested on 10 years of data and provided positive results in terms of being able to predict stock performance for individual companies over a range of three to six months.[13]

References

  1. ↑ Reid Kanaley (April 7, 2011). "Get data, expert advice for stock market moves". Philly.com/The Philadelphia Inquirer. Retrieved March 27, 2012.
  2. ↑ John Dobosz (January 18, 2012). "Separating Chumps From Champs In Retail, Banks And Tech". Forbes: Market Blaster. Retrieved March 28, 2012.
  3. ↑ Michael C. Thomsett (2010). CMF--Chaikin Money Flow: Changes Anticipating Price Reversal. The Financial Times Press.
  4. 1 2 Charles D. Kirkpatrick, Julie R. Dahlquist (2012). Technical Analysis: The Complete Resource for Financial Market Technicians. Financial Times Press. pp. 421–422.
  5. ↑ Robert W. Colby (2003). The Encyclopedia of Technical Market Indicators. McGraw-Hill Professional. p. 51.
  6. ↑ Berni Moestafa (December 21, 2009). "London Sumatra May Fall on Chaikin Turn: Technical Analysis". Bloomberg.
  7. ↑ Buff Dormeier (2011). Investing with Volume Analysis: Identify, Follow, and Profit from Trends. Financial Times Press. pp. 136–137.
  8. ↑ Michael C. Thomsett (2012). Bloomberg Visual Guide to Candlestick Charting. John Wiley & Sons. p. 265.
  9. ↑ Martin J Pring (2002). Momentum Explained, Volume 2. McGraw-Hill Professional. pp. 60–68.
  10. 1 2 Asli Celikyilmaz and I. Burhan Türkşen (2009). Modeling Uncertainty with Fuzzy Logic: With Recent Theory and Applications. Springer. p. 368.
  11. ↑ Alan Butler (March 6, 2012). Marc Chaikin, founder of Chaikin Power Tools, tells us how to invest like the pros!. Interview with Marc Chaikin. Butler on Business. Retrieved March 28, 2012.
  12. ↑ THERESA W. CAREY (March 26, 2011). "OptionsXpress Gives Schwab a Leg Up". Barron's. Retrieved March 28, 2012.
  13. ↑ Alan Earls (November 15, 2011). "Top Five Apps for Investing and Finance". NASDAQ.com. Retrieved March 29, 2012.
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