🔬 Analysis Methods

Chart intervals & multi-timeframe, Andrews Pitchfork, pivot points and the relative strength concept

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1 Chart Intervals & Multi-Timeframe Analysis 2 Andrews Pitchfork 3 Pivot Points 4 Relative Strength — The RS Concept

1. Chart Intervals & Multi-Timeframe Analysis

Every trader operates on a time interval — but very few check what the higher-level interval is saying. The top-down principle solves this problem: first understand the primary trend, then look for the setup, then fine-tune the entry.

Which Interval for Which Style?

Style	Analysis Chart	Setup Chart	Entry Chart
Intraday	60 Min	15 Min	5 Min
Swing (2–10 days)	Weekly	Daily	4 Hours
Position (weeks/months)	Monthly	Weekly	Daily

The Top-Down Principle

Weekly chart: Where is the primary trend? Upward, sideways, or downward?
Daily chart: Where is the specific setup — breakout, pullback, base formation?
Hourly chart: Where exactly is the entry with a tight stop?

Iron Rule: Never enter against the higher-level trend. A long setup on the daily chart is only valid if the weekly chart shows an intact uptrend. If it does not, it is a counter-trend trade — higher error rate, tighter stop required.

Practical tip: Always open at least two charts side by side (weekly + daily). Charting platforms like TradingView support this with a split screen. Looking at only one chart means seeing only part of the picture.

2. Andrews Pitchfork

The Andrews Pitchfork (developed by Alan Andrews) is a trend-channel tool that constructs a median channel using three pivot points. It shows where price is statistically likely to return to the center — and where the extreme zones lie.

Construction: The A-B-C Method

Point A: A prominent high or low (the starting point of the pitchfork)
Point B: The next significant counter-low (if A was a high)
Point C: The next high after B (higher than B, but below A)

The median (center line) runs from A through the midpoint of B–C. The upper and lower lines run parallel through B and C respectively.

Signals at the Pitchfork

Situation	Signal	Action
Price tests median from below	Resistance	Short setup or take profits
Price tests median from above	Support	Long setup
Price reaches upper line	Upper extreme zone	Caution on longs, possible rebound back to median
Price breaks below lower line	Structure break	Redraw pitchfork, trend broken

Core Principle: Markets have a tendency to revert to the mean (mean reversion). The pitchfork makes this center of gravity visible. If price holds the median as support, the trend is intact. If it breaks below, caution is warranted.

Pitchforks work best in trending markets with clear swing points. During sideways phases they lose their predictive value — in those cases, use classic horizontal support/resistance levels instead.

3. Pivot Points

Pivot points are calculated price levels derived from the previous trading day. They are among the most widely used tools among professional traders — because many market participants watch them simultaneously, they acquire a self-fulfilling quality.

Calculating Standard Pivots

Level	Formula	Meaning
PP (Pivot Point)	(H + L + C) / 3	Center of the trading range
R1 (Resistance 1)	2 × PP − L	First resistance
R2 (Resistance 2)	PP + (H − L)	Second resistance
S1 (Support 1)	2 × PP − H	First support
S2 (Support 2)	PP − (H − L)	Second support

H = yesterday's high, L = yesterday's low, C = yesterday's close

Two Trading Setups

Bounce at pivot: Price approaches PP or S1, shows a reversal candle → long with stop below the level
Breakout through pivot: Price breaks R1 on volume → long targeting R2, stop back below R1

Daily Pivots vs. Weekly Pivots

Daily pivots (calculated from the previous day) suit intraday and swing trading up to 2–3 days. Weekly pivots (calculated from the last trading week) are more relevant for longer swing positions. In TradingView both are available with one click (Indicators → "Pivot Points Standard").

4. Relative Strength — The RS Concept

The RS concept (not to be confused with the RSI indicator) answers a simple question: Is this stock stronger or weaker than the overall market? Buy strength, avoid weakness — that is the fundamental principle of stock selection according to Mansfield and Minervini.

What Is Relative Strength?

The relative strength of a stock is calculated as the ratio of the stock's performance to the index's performance over a given period. When the RS line is rising in the chart, the stock is outperforming the market. A falling RS line signals underperformance — even if the price is rising in absolute terms.

RS Line	Meaning	Trading Implication
Rising + new highs	Stock is beating the market	Buy candidate in a strong market
Flat	Stock is keeping pace with the market	Neutral — there are better candidates
Falling	Stock is losing ground vs. market	Avoid — it will fall more in a weak market

Connection to the Minervini Trend Template

An RS Rating ≥ 70 is criterion No. 8 of the Minervini Trend Template (Module 6.7). It ensures that a stock qualifies as a Stage-2 candidate only if it is not just in an uptrend, but also outperforming at least 70% of its universe. RS and the Trend Template complement each other: the Template filters for trend structure, RS filters for relative strength.

In TradingView: open two charts side by side (stock + index), or use the "Compare" mode. Many broker tools display the RS line as a separate indicator. IBD (Investor's Business Daily) publishes weekly RS ratings for US stocks.