Stock Market Charts And Their Components

Are you looking for a way to predict and keep track of price movements of stocks that you want to trade in? Well, stock market charts are the key. They are especially useful for investors who keep stocks for a temporary period and then sell them. Stock Chart Layout Identifying information for a stock is at the top of the chart. The date and stock’s ticker symbol is given. The day’s highest, lowest, and closing prices are mentioned. The volume of shares that have been traded that day is also stated. The time period that this stock chart covers varies. It can have one day’s trading information, a few weeks or maybe even several years. Some stock charts also include some additional information like average prices for the previous 30, 60, or 90 days.

• Price Graph:

Price graphs are placed in the middle of the stock chart. Its graph may consist of a set of uneven, serrated lines or adjacent bars (candlesticks). If the price graph line is pointing towards the upper right corner of the chart, it shows that stock prices are on an upward trend. When price graph lines are arrowed towards the lower right corner of the graph, this shows a downward trend.

• Resistance Level:

At times prices reach the same high level several times, and then keep falling back. This is known as resistance level and it indicates that the investors believe that the stock’s value will not increase any further so they stop buying. Reduction in the purchase of the stocks results in  a decrease in stock demand, consequently causing a fall in stock prices.

• Price Support:

Price support phenomenon occurs when there is a downward trend in prices and then reverses directions several times. This low price is called price support level. This is the level at which the investor’s demand for the particular share is sufficient enough to drive the prices back up.

• Candlesticks :

Candlestick stock charts make use of bars and provide further information. The length of the bar is the determinant of the opening and closing prices. White bars show a profit and coloured bars show losses. When the stock is going up, the top of the bar shows the closing price, while the bottom of the bar shows the opening price. There are short lines extending below and above the bar that show the high and low prices for the day.

• Volume:

Coming to the bottom of the stock chart there is a bar graph which records the number of stocks traded daily. The taller the bar, the larger the amount of shares traded. The number of times shares change hands is a crucial point. Traders often tend to switch their position from buyer to seller, foreshadowing the reversal of a stock price. This is an ideal time to sell stocks because you want to try and sell your stocks at the highest level available. This is how a stock market chart is laid out. By knowing the basics, you would be able to analyze the trends in a more effective manner. Author Bio: The author Barbara is a Stock market charting expert at Stock Radar - Stock Market Charting. He provides great and effective tips on stock market charting.