Stock Line Charts
Technical Analysis of Stock Line Charts
Stock line charts are the most basic of the four stock market analysis charts (line chart, bar chart, candlestick chart, and point and figures chart) because they represent only the closing prices over a set period of time. The stock line chart is formed by connecting the closing prices over the specified time frame.
Line charts do not provide visual information of the trading range for the individual points such as the high, low and opening prices. However, the closing price is often considered to be the most important price in stock data compared to the high and low for the day and this is why it is the only value used in stock line charts.
On a stock line chart, if the line is steadily progressing upward, the stock is consistently increasing in price. On the other hand, if there is a dip in the progression of a line, it indicates a decrease in the price. Stocks that have a zig-zag stock line chart are considered volatile and the erratic behavior can make it difficult for market watchers to predict the immediate future of that stock.
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