How to Read a Stock Chart. Investing for Beginners Series #15 // Reading Stock Charts david moadel
welcome to looking at the markets with David Modell today I'm going to give you
some basic information on how to read a stock chart and this is another video in
my series investing for beginners where no question is too beginner ish and you
should never be embarrassed or afraid to ask basic questions about stocks and
charts and investing trading things like that and if you have more questions
about it something that is not covered in this video you can or if you just
need to review or you want some help putting together a trading or investing
plan because you really need to have a plan if you're going to succeed at this
over the long term you can email me at any time my email address is right down
there below on this video it is David Modell at gmail.com alright so how to
read a stock chart maybe you've seen stock charts and you're confused it's
okay we'll start you at the beginning so one place I like to go is Yahoo Finance
and you can visit there it's just finance dot yahoo.com another good one
is Google Finance which is Finance google.com that's how you get there and
there are other websites that have charts as well so those are just two of
them but let's say you're using Yahoo Finance just as an example and you can
type in you go to the search box type in your favorite company it could be
McDonald's Disney coca-cola whatever it could be Apple
let's try Apple let's say you type in Apple because maybe you don't know what
the ticker is and the ticker is the stock symbol but it'll probably figure
it out and you just click on the one that you think is right Apple Inc a lot
of times it's the first one that pops up and then you scroll down a little bit
and you can see the price of Apple stock right now if you were to buy one share
of Apple stock it would cost one hundred one hundred ninety one dollars and
seventy cents and as you can see there's a chart there and that chart it shows 1d
well that means one day and so this shows the price during one trading day
which if you're on the if you're in the Eastern time zone in the United States
that would be the trading day and by trading I mean this is when most people
buy and sell shares of stocks and so that trading day is on the New York New
York Stock Exchange which is the most popular place where people buy and sell
stocks in the United States it opens the trading day opens or starts at 9:30 a.m.
Eastern Time and closes or stops at 4:00 p.m. Eastern Time and so this line here
shows the price all right it started up here and it actually shows it on the
right side of the screen it started the day at 190 dollars and 89 cents for one
share of Apple stock and then the price went down that went up and down and over
the trading day it tilted upwards it slanted upwards a bit not a huge price
movement but what's interesting is since it does look like it went up how is it
possible that it's down for the day it's down point 91% or a dollar and 76 cents
per share how is that possible well if you click on five D C one D represents
one day one trading day of price action for the stock shares click on five D
that represents five days it shows what happened the last five trading days and
trading days do not include weekends or certain major holidays the New York
Stock Exchange is closed well take a look over the last five days the price
started here at one hundred ninety two dollars and eighty cents or so and then
it chopped around okay kind of went up and down and then pretty much went
sideways not exactly sideways but relatively
sideways but then at the here's the end of the day on Thursday I should say the
end of the trading day at 4 o'clock Eastern Time
4:00 p.m. and then what happened was you see just because the regular trading
session ends at 4 o'clock p.m. Eastern Time on the New York Stock Exchange
doesn't mean that all trading halts completely it is possible to buy and
sell app shares of Apple stock and certain other stocks after 4:00 p.m. in
fact a lot of people trade until 8 p.m. 8 o'clock p.m. Eastern Time and that is
known as after-hours trading and also for people who wake up very early in the
morning there's also pre market trading and so
it's possible also to trade the next morning before the regular session opens
before 9:30 a.m. Eastern Time and so the price can move around especially if
there's bad news that happens after the market closes or before or before the
market opens the next morning if there's just bad news about Apple let's say
overnight or in the early morning session that can cause the price to drop
and then when you wake up the next day and it's 9:30 a.m. Eastern Time the
price is lower than where it closed or ended the previous trading day and so
that this would be called a gap down all right
whereas if the price let's say if there was really good news about Apple
overnight or in the early morning it's possible to have a gap up where the
price can actually open higher than it had closed at the previous trading day
so that's how it's possible you see the the next the next day it's possible for
the price to be significantly lower then it closed the previous day and so even
though the price went up throughout the day it's still closed lower than it it's
still closed on today lower than it had closed the previous trading day and
that's how it's possible that the stock share price is down even though it
drifted upwards throughout the day it's still closed
andddd lower than it had closed or ended the previous trading day so that's an
explanation for that and as we can see the price pretty much is lower even even
though it drifted a little bit upwards throughout the week there was that big
gap down there and so it's still closed lower then it had opened over here we
can click on one M that represents one month one month of price action and we
can see there was a lot of sideways chop here as they say and then a big up move
and then more sideways chop around okay you can look at six months and you get a
bigger picture I recommend looking at multiple timeframes when you're
assessing or evaluating a stock all right so we can see okay it went
sideways and then down then right back up sideways down right back up and up a
little bit so it's pretty much trended gradually upwards for the last month or
so or I'm sorry for the last six months or so
YTD that is year-to-date and so you can see the price action of Apple stock
shares starting from January 1st all the way through today one why that's one
year and you really get a nice big picture view of it when you pull back
the chart so to speak and look at the longer time frames like one year you can
see that you see if you just look at one month or five days you see if you just
look at five days you'd think Oh Apple stock is not doing well but then when
you look at one year you can see that over time it has been doing well it's
had some dips but it recovered from pretty much all the dips here five years
gives you a very long-term timeframe okay and you can see there were there
was a rough patch here but over time Apple stock did go up and then max goes
all the way back to the 1980s back to 1980 actually now it's it's possible for
a company to exist before the stock exists you know companies don't always
put out a stock immediately and that's called an IPO initial public offering
when when a company starts to offer shares of
stock that people can buy and sell alright and let's go back to let's say
one year or six months you'll be able to see these logo you can see it more
clearly on the six-month chart and you can see these little bars here
that's volume what volume means is how many shares of stock were traded or
bought and sold so when there's a big bar here a large one that means that
there was a lot of volume so a lot of at that time many shares of Apple stock
were being bought and sold at that time now it's a it's red and so that means
that the price was going down but you can see the volume was going up and so
that means there was heavy selling as they say a large volume of shares being
sold and so some people would say that when that happens that the price might
continue to go down after that but that prediction is not a hundred percent true
all the time and so here we have a actually not much later than that we
have a large green bar they're showing the volume and so you have a heavy
volume here a lot of shares of Apple stock being bought and sold and but that
green bar means that the price was going up at that time and so some people might
predict after a large green volume bar that the price might continue to go up
after that but again that's a prediction that is not 100% true all the time
now if you're just starting out I recommend that you start out with a line
chart I think that's the easiest to read and understand for a beginner on Yahoo
Finance they have area charts which in red green areas which look kind of like
I don't know mountains maybe that might be harder to read for some people and
then you've got candlestick charts which are more advanced and I recommend
getting involved with those later on when you get more advanced because they
do give more information with the candles than with the line
Graff here and I have videos on how to read candlestick charts so feel free to
read those so this was a quick introduction on how to read a stock
chart there's a lot more to learn of course but I think this will help to
demystify the chart and to make it a little bit more understandable for you
if you'll excuse me if you like this video please give it a thumbs up on
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you can contact me if you have questions if you like some help putting together
and investing or trading plan maybe have questions about stocks stock charts
stock fundamentals anything like that you can email me at any time my email
address is right down below it's David Modell at gmail.com thank you so much I
really appreciate it and I'll talk to you again soon
you