How to Read Stock Charts: Technical Analysis Guide

Introduction

Stock charts show price movements over time. Common types: line charts, bar charts (OHLC), and candlestick charts which are most popular for technical analysis.

Candlestick Patterns

Green candles close higher than open (bullish). Red candles close lower (bearish). Key patterns: Doji, Hammer, Engulfing, Morning Star.

Support and Resistance

Support is where buying prevents further decline. Resistance is where selling prevents further rise. Breakouts signal trend changes.

Moving Averages

SMA calculates average over a period. EMA gives more weight to recent prices. 20-day for short term, 50-day medium, 200-day long term.

RSI and MACD

RSI measures momentum from 0-100. Above 70 overbought, below 30 oversold. MACD shows relationship between two moving averages.