Fwd: Day 1: Here’s how to read a stock chart like the pros.

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On Nov 25, 2021, at 5:31 PM, Investor's Business Daily <reply@email.investors.com> wrote:

Find out what all the lines mean and why they matter for investors.

Welcome to Day 1 of our series on stock charts! You've got some great chart reading lessons coming your way, including 4 short videos and additional resources at the end of these emails if you want to dive deeper. Ready to get started? Today, we're going to take you through the basics of reading a stock chart. Over the next few days, you'll learn about price and volume, moving average lines and the relative strength line. Then we'll tie it all together with the three simple keys to look for before you buy a stock. First of all: Why are charts important? We'll give you three good reasons to use charts before you buy or sell a stock. Stock charts tell a story. A chart is a visual representation that tells you important things that are going on with a stock. One of the most important things they reveal is when large institutions (think hedge funds, mutual funds, pensions, etc.) are buying and selling a stock, which is the #1 factor that moves a stock's price. Charts show you when to buy and sell. IBD's investing methodology uses fundamentals (like earnings and sales) to determine which stocks to buy. We use charts to determine when to buy and sell stocks. The ideal time to buy a stock is when it's breaking above a price level of prior resistance on high volume, which is simple to identify on a stock chart. Charts help you tilt the odds of success in your favor. Even if you are able to pick all the best stocks, if you buy them at the wrong time then you're taking on unnecessary risk. The company may have solid fundamentals and be a good long-term play, but if the stock is mired in a slump or the market is in a correction, it's not likely to produce gains any time soon. The Anatomy of a Stock Chart Charts are more than just a bunch of lines and numbers. Here's a quick look at an IBD bar chart with an explanation of the six most important areas to focus on. Price Bars: This shows the range of a stock's price during the day. The horizontal hash mark shows the price where the stock closed for the day. The color of the price bar indicates whether the stock closed up (blue) or down (red) in price. Volume Bars: Shows the volume, or amount of shares traded during the day. A blue volume bar represents a day where the stock closed up in price, and a red one indicates that the stock closed down in price. Moving Average Lines: The red line shows the average share price during the last 50 days (on a daily chart) or 10 weeks (on a weekly chart) of trading. The black line shows the average share price during the last 200 days (on a daily chart) or 40 weeks (on a weekly chart) of trading. It's helpful for visualizing trends in a stock's price. Volume Moving Average Line: The red line shows the average volume for that stock over the last 50 days. Volume Percent Change: A measure of the relationship between the most recent trading activity to the number of shares traded on an average daily basis (over the last 50 trading sessions). Relative Strength Line: Compares the price movement of a stock to the price movement of the S&P 500 (which is often used to represent the overall market). If the line is trending up, the stock is outperforming the S&P. Go deeper: Check out Stock Charts Decoded, IBD's interactive guide to all the lines and symbols on a chart. Get started: Want to learn more about investing? Sign up for IBD's free How to Invest newsletter! Every week you'll get useful tips on charts, buying, selling and more. ">SIGN UP > Coming soon: Check your inbox tomorrow for a lesson all about price and volume action! UNSUBSCRIBE | MANAGE SUBSCRIPTION | PRIVACY | TERMS Sent to: stevescott@techacq.com Investor's Business Daily, LLC, PO Box 92042, Los Angeles, CA 90009 | Copyright 2021 Need help? Have feedback? Feel free to contact us ID: 8275