The Bar Chart
Your friend told you to look at the bar chart of AAPL, after the close of Oct 11, 2007.If you are like me, the first time I reviewed a chart - you probably said: "Whoopee - now what!!"
We shall review the following AAPL Chart. I do not currently hold a position in AAPL.
Charts below are provided courtesy of Stockcharts.com.
Please visit their site for more chart information.
http://stockcharts.com/
Charts: Courtesy of StockCharts.com.
The Open price is the left pip on the bar 169.40. The Close is the right pip on the bar 162.23. The High for the day was 171.88. The Low for the day was 153.21. If you are new to charts you are probably thinking - charts are complicated. These charts are Voodoo Magic and will not help me find an exit or entry point.
Weekly charts are utilized to determine the underlying trend of the stock. The weekly chart is plotted with data for the entire week. The weekly chart below has the same time-frame as the daily chart above. A support line has been drawn connecting the lows of several weekly bars. Support lines assist you in identifying the trend of the stock. If support is broken (stock falls below the support line) then the trend has been broken and it may be time to exit your position.
The chart below has support and resistance lines drawn on a daily chart. The support line is an approximation drawn along the lows of the daily bars. The resistance lines are drawn across the highs of the daily bars. When a stock breaks out above the resistance line the stock usually trends higher. Wow - a Breakout!
Notice how AAPL found support at the SUPPORT line on OCT 11 and then bounced higher.
We shall now add a few overlays to the bar chart below to get a better picture of AAPL. We will add Bollinger Bands with a 20 day Moving Average (20 MA) in green. A 10 MA in blue. A 50 MA in red. Notice the high of AAPL on OCT 11 it hit the upper Bollinger Band and then retraced. The Low for AAPL on OCT 11 hit the 20 MA support and bounced higher. AAPL closed just above the 10 MA. Charts are Hocus Pocus? I do not think so. They tell the story.
Click on Chart to enlarge Daily Chart
The Open price is the left pip on the bar 169.40. The Close is the right pip on the bar 162.23. The High for the day was 171.88. The Low for the day was 153.21. If you are new to charts you are probably thinking - charts are complicated. These charts are Voodoo Magic and will not help me find an exit or entry point.
Weekly charts are utilized to determine the underlying trend of the stock. The weekly chart is plotted with data for the entire week. The weekly chart below has the same time-frame as the daily chart above. A support line has been drawn connecting the lows of several weekly bars. Support lines assist you in identifying the trend of the stock. If support is broken (stock falls below the support line) then the trend has been broken and it may be time to exit your position.
Click on chart to enlarge Weekly Chart
The chart below has support and resistance lines drawn on a daily chart. The support line is an approximation drawn along the lows of the daily bars. The resistance lines are drawn across the highs of the daily bars. When a stock breaks out above the resistance line the stock usually trends higher. Wow - a Breakout!
Notice how AAPL found support at the SUPPORT line on OCT 11 and then bounced higher.
Click on the Chart to enlarge
We shall now add a few overlays to the bar chart below to get a better picture of AAPL. We will add Bollinger Bands with a 20 day Moving Average (20 MA) in green. A 10 MA in blue. A 50 MA in red. Notice the high of AAPL on OCT 11 it hit the upper Bollinger Band and then retraced. The Low for AAPL on OCT 11 hit the 20 MA support and bounced higher. AAPL closed just above the 10 MA. Charts are Hocus Pocus? I do not think so. They tell the story.
Click on Chart to enlarge
The next post will contain information on Candlestick charts. We will use the same date range for AAPL so we can compare a Bar Chart to a Candlestick Chart. They both use the same data but the Candlestick information jumps out at you.
I actually utilize both chart styles prior to entering a trade. I like to use the Bar Charts to determine support and resistance zones and then I use Candlestick charts to determine my entry and exit points.
Have a great day!
Jethro
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