Weekly and Daily Charts

Charts Overview

Stock and commodity charts and graphs are used worldwide by traders, investors, and financial analysts in order to identify short- and long-term trends in the market and to help make decisions about when to buy and sell stock or commodities. Charts are utilized to follow specific stock values as well as values of similar stocks for comparison. One of the key elements of all charts is the time factor, indicated along the horizontal axis. There are daily, weekly, monthly, and yearly charts, each of which can serve investor interests for specific purposes.

Line, Bar, and Candlestick Charts

There are many different types of charts, among them line charts, bar charts, and candlestick charts that graphically depict price movements of specific stocks. Particularly helpful are open-high-low-close charts, or OHLC charts, which show the highest and lowest prices a stock hits over a given period of time, as well as its opening and closing prices.

Daily Charts

Many day traders use daily charts to follow stock movements and to try to discover short-term price trends. Day traders are people who buy and sell stock on the same day and who capitalize on the volatility of the market to make a profit. However in order to get a true picture of stock trends, daily charts are not an ideal source. Closely following the price 'ups and downs' of a single day can offer misleading information about the tendencies of stocks and commodities. Therefore weekly or monthly charts are considered more reliable economic indicators.

Weekly Charts

Weekly charts or graphs depict a summary of price movements from the start of a week to the end of a week, including the highest and lowest values reached that week. Some weekly charts provide weekly values for a period a year or several years with the goal of showing true market place patterns or long-term trends. Weekly chart data are said to provide a more realistic and comprehensive view of activity than daily numbers and charts. Since current weekly values are showed within the context of previous weekly values, weekly charts are an important analysts' tool to uncover trends and predict future movements. Based on their analyses, investors can then make more informed decisions about buying and selling stock and commodities.

Recognizing Trends

Trend recognition refers to the use of charts to determine or to estimate price patterns. From novices to experts, charts are one of the most fundamental tools for successful stock market investment. Basically, chart surveyors look for 'new highs' and 'new lows' on a chart, which indicate whether or not a given stock is trending. For example, a stock is said to be trending if a new high is reached that surpasses the previous high, and a new low is formed that is higher than the previous low. Investors often buy into a trend with the hope that yet another new high will follow, leading to increased profits.