By making additional adjustments to corporate action, split and dividend, we ensure that all price movements on our charts are caused by pure market forces - that is, the forces that Technical Analysis attempts to identify.
Dividend
Cash Dividends, paid to shareholders that hold the stock before the ex-dividend date
Prices before the ex-dividend date need to be adjusted.
Example
Stock Price 40
Dividend 2
Price after Dividend 38
| -> | ||
|---|---|---|
| 40 | 38 | |
| 1 | 0.95 |
- multiply all historical prices before ex-dividend date by the factor of 0.95
Split
Adjustments for stock splits are similar, divide the number of shares after the split by the number of shares before the split.
Example
To adjust for a 2-for-1 split, divide 1 by 2. The factor is 0.5. Multiply all historical prices prior to the split by 0.5.
