Language Matters: Tech Talk: The Ichimoku Cloud

Thursday, August 04, 2016

Tech Talk: The Ichimoku Cloud

By Peter McKenzie-Brown

Japanese journalist Goichi Hosoda developed the ichimoku cloud and published the idea in the late 1960s. It interprets information taken from candlestick charting.

The body of this chart suppresses all the usual indicators I use, to highlight the Ichimoku cloud, which is what I want to illustrate. The cloud itself consists of pink and green patterns, but it also has indicator lines in blue, red and green.

In this case, it applies to Fossil Group Inc. (FOSL), the purveyor of consumer fashions and accessories under labels such as Fossil, Diesel, Adidas and Burberry. Since October 2014, its share price has dropped by more than $100 – $60 since last August. Today the share has a price-to-book of 1.5, and a 20-per-cent return on equity. In fundamental terms, that makes it quite attractive.

Full disclosure: I recently bought some, based on the stock’s double bottom (share prices are now trading through the resistance they established last January 20^th) and the little green cloud on the far right of the chart.

The trend is up when prices are above the cloud’s future-based projection, down when prices are below the cloud and flat when they are in the cloud itself. The cloud is the most prominent feature of the Ichimoku Cloud plots.

There are two ways to identify overall trend using the cloud. The trend is up when prices are above the cloud, down when prices are below it and flat when prices are within. Techies see the uptrend as stronger when the green cloud line is rising and above the red cloud line. This situation produces a green cloud. Conversely, they worry when the green line is falling and below the red line – a situation which produces a pink cloud. Because the cloud projects activity 26 days into the future, it offers a glimpse of future support or resistance. In this case, the green cloud seems to suggest that prices are about to rise.

Of course, I could be wrong. I never make buy or sell recommendations.

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Bumpf

A Calgary-based writer, author and historian, during the last three decades I have done work for several corporate clients and also for industry and business publications – notably the trade magazines Oilweek and Oilsands Review. I have written about 1,000 magazine and journal articles, and executive speeches for a petroleum industry trade association.

For two years (2003-4) I taught both undergraduate and graduate English courses at Chiang Mai University in northern Thailand, having earned qualifications through distance learning with the University of Saskatchewan. I later joined Chiang Mai University's Language Institute (2005-6), where I developed a course for mostly western students wanting to teach English as a foreign language. In this program, each of my students needed to develop and conduct a classroom session to pass. All the students in these sessions observed the classroom activities, and offered critiques the following day, as part of the teaching process.

After returning to Calgary, I revised, updated and copyrighted my study guide, which I titled The Language Instinct: Reflections on Teaching English as a Second Language. In many ways, the graphic I used on the title page of the book - it was freely available online - summarizes my perspective on teaching and writing as occupations.

My other books include Bitumen: The people, performance and passions behind Alberta's oil sands (2017); Footprints: The Evolution of Land Conservation and Reclamation in Alberta (2016, with Robert Bott and Graham Chandler); Barbecues, Booms and Blogs: Fifty Years of Public Relations in Calgary (2008; co-editor and contributor); In Balance: An Account of Alberta’s CA Profession (2000, with Stacy Philips); The Richness of Discovery: Amoco’s First Fifty Years in Canada (1998); and The Great Oil Age: The Petroleum Industry in Canada (1993, with Gordon Jaremko and David Finch.)

I was coordinator and an interviewer for the Petroleum History Society's Oil Sands Oral History Project, which conducted 117 interviews with key people associated with the oil sands, and had each transcribed. For this and other contributions to its work, the society awarded me a Lifetime Achievement Award - only the second person to receive that honour - and named its substantial library after me.

Two of the books noted above - Footprints and Bitumen - have received the society's Book of the Year award.

British by birth, I am American by upbringing and Canadian by choice. I have completed the grueling Ironman Triathlon eleven times – twice in Hawaii, the other times in Penticton, British Columbia.