Line charts
A line chart connects the closing price of each day (or week). It is the simplest way to see the trend. You can see one on every stock page here, such as NABIL, which draws the last year of closing prices.
Candlestick charts
A candlestick shows four prices for one period: open, high, low and close.
- The body is the range between open and close. It is usually green when the price closed higher than it opened, and red when it closed lower.
- The thin lines, called wicks, show the highest and lowest price reached.
- A long wick shows the price moved a lot but came back.
Volume
Volume is how many units traded. A price move on high volume, with many people involved, is usually more meaningful than the same move on very low volume.
Trends
- An uptrend has higher highs and higher lows.
- A downtrend has lower highs and lower lows.
- A sideways market stays inside a range.
Support and resistance
Support is a price area where a share has often stopped falling. Resistance is a price area where it has often stopped rising. They are not guarantees; prices can break through.
Moving averages
A moving average smooths the price by averaging the last N days. When the price is above a rising average, the trend is usually up. Charts in the app can show indicators like this.
Limits of charts
Charts show the past. They do not know about tomorrow's news. Combine them with the company's numbers, such as EPS and P/E, and be careful with thinly traded shares, whose charts can look dramatic with very few trades.
Practise reading charts
Open a free practice account and look at candlestick charts of real NEPSE stocks while trading with virtual money.
For education only. Not investment advice.