Flag equities approaching an ex-dividend date and estimate the technical price impact
Answers whether an ex-dividend date is distorting a stock's technical picture. It reads up to 90 adjusted daily equity candles and recent corporate-actions data, then computes the dividend yield impact, the latest one-day return, and days to the ex-dividend date. It classifies each name as approaching ex-dividend, a dividend-adjusted false breakdown, a clean post-dividend breakdown, or no material context, with a score and an alert/insight flag. Use it to avoid mistaking a routine dividend drop for a genuine support break.
Corporate actions and price continuity - a small analysis teaching an idea that matters everywhere in market data.
WHAT HAPPENS ON THE EX-DIVIDEND DATE. A buyer on or after the ex-date does not receive the declared dividend, so the share is worth less by approximately that amount, and the price opens lower by roughly the dividend. This is not a decline in value: the holder has the cash instead. In frictionless theory the drop equals the dividend exactly; empirically the ratio has been measured somewhat below 1, and the classic explanation involves differential taxation of dividends and capital gains (Elton and Gruber, 1970), with market microstructure and transaction costs as competing explanations. The debate is worth knowing; the practical point is that the drop is mechanical and is not information about the business.
WHY THIS BREAKS TECHNICAL ANALYSIS, which is the reason the analysis exists. Every indicator built on a price series - a moving average, a support level, RSI, a drawdown - assumes the series is CONTINUOUS in the sense that each change reflects a repricing. A dividend introduces a discontinuity that is a distribution rather than a repricing. A stock paying a large dividend can be shown breaking a support level on the ex-date without a single participant selling, and a mechanical rule reading that as a breakdown is reading an accounting event as a market event.
ADJUSTED PRICES ARE THE STANDARD REMEDY. Historical prices are multiplied by a factor that removes the dividend and split effects, so returns computed from the series are total returns and the artificial gap disappears. This analysis reads ADJUSTED candles, which is the correct choice - and it is worth knowing precisely what that means: adjusted history changes as new dividends are paid, so the same past date can show a different price today than it did last year. Comparing an adjusted series to an unadjusted one, or to a level someone recorded from an unadjusted chart, produces silent mismatches. Splits create the same problem far more dramatically: an unadjusted 2-for-1 split looks like a 50% crash.
THE FALSE-BREAKDOWN CLASSIFICATION is therefore a cross-check between the corporate-action calendar and the technical picture: was there a real break, or a distribution? That is a well-posed question with a definite answer, which makes this one of the more solidly grounded analyses in the catalog.
DIVIDEND YIELD is the annual dividend divided by price - note that it rises when price falls, so a high yield can reflect a falling price rather than a generous payout.
The 90-day window, the classification labels and the scoring are our own convention.
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