Technical Analysis and Dividends

[smaksy]

Hi there!
I have two platforms for the Technical Analysis: one of these considers the dividends payed from the company and the other one no!
In your opinion, which one is more correct to use for the technical analysis?
Thanks a lot!
Bye,
Max

 

[Jaydee]

Hi Max

An interesting question this one. I'll give you my opinion:

When a stock goes XD, the share price drops temporarily intraday. In my experience, TA doesn't work well with stocks intraday, so it shouldn't make a lot of difference which method you use. Daily TA charts will absorb the minor dividend corrections, so it should make any difference on the grand (daily scale).

I would be interested to see a couple of chart pics showing a stock using the TA + Dividend and TA - Dividend for comparative purposes, if you could provide them.

Best

JD

 

[smaksy]

Hi Max

An interesting question this one. I'll give you my opinion:

When a stock goes XD, the share price drops temporarily intraday. In my experience, TA doesn't work well with stocks intraday, so it shouldn't make a lot of difference which method you use. Daily TA charts will absorb the minor dividend corrections, so it should make any difference on the grand (daily scale).

I would be interested to see a couple of chart pics showing a stock using the TA + Dividend and TA - Dividend for comparative purposes, if you could provide them.

Best

JD

Here it is an example for UCG.MI.
I'd like to receive a your opinion.
Bye,
Max

 

[Jaydee]

Hmmm, I didn't expect quite as much difference as that.

Use the rebased TA chart which takes into account the dividend (+ Dividend). It clearly makes a lot more difference than I originally thought.

JD