If you have been a stock investor for a considerable period, you would know the significance of stock chart, and if you happen to begin your journey in stock investment, them let’s guide you on this critical aspect of navigating through the stock market.
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What is Stock Chart?
The stock chart is a price chart that shows a stock price allotted over a timespan. It records the history of stocks, and historical stock charts are essential for investors to determine which stock is moving up and down. The recorded price and volume history helps in ascertaining whether the stock is appreciating or depreciating. If one becomes adept in stock chart reading it also helps by telling whether the stock is behaving normally or abnormally, is it falling in or out of the institutional investors and more such vital clues helps in strategically investing in a stock? Historical stock charts help in the accurate technical analysis so that you can accurately evaluate stock market trends, support level, resistance level, etc. These techniques further assist you in adequately reacting to change in the behavior of the stocks you own.
Following are the critical set of information, you can find in a stock chart:
It means the data of the stock trends evaluated daily, weekly, monthly. Quarterly, annually. While investors concentrate on weekly and monthly charts to spot long-term price gain, investors, with their prime focus on short-term stock movement keep an eye on the 3 daily and intraday data.
It displays the daily changes in the price. The color of the price bar denotes whether the stock is down for the day, i.e., red or closed for the day, i.e., blue. The small horizontal dashes tell the current price or where the stock has closed for that day, and the vertical bars in the price area shows the price range for that day.
The number of shares traded is indicated by the volume bar, and it is indicated by the vertical bars in the volume area. The color of the volume bar denotes whether the stock is closed up for the day with red color or down for the day with blue color. If a stock moves on a low volume, the current price movement is no attracting many people, and the trend might not go far but if the stock runs to high volume, people are interested and participating in the price movement, and the trend is likely to stay.
Daily Trade Range:
The vertical lines on the chart represent one independent trading day. Black bar means the stock or the index was up or even compared to the previous day whereas the red bars indicate the stock or the index was down overall on the day when compared to the last day.
Stock symbol and exchange:
The stock symbol represents the company, and the stock exchange shows the exchange on which the stock is traded.
Moving average helps in identifying support and resistance on the chart.
Mentioned above are some basics of the stock chart. To be a pro in stock market exchange one should master the art of stock chart reading. If you need any help with stock charts fundamentals, trust this online equity research firms that provide 100 years of historical stock fundamental performance, without any gaps in earnings adjusted for splits thereby giving accurate and complete data.