Chapter 6
Seeing What’s Trending with Line Charts
IN THIS CHAPTER
Exploring the basics of line charts
Setting up a line chart
Drawing trend lines for support and resistance
Are you the type of investor who is just interested in following the closing price for the day? Many investors consider that the most important piece of information. When they look at their monthly stock reports, the closing price gives them what they want to know: Is the price higher than it was the month before? The line chart gives these investors a picture of what is most important to them — the trend of the closing price over a particular period of time.
In this chapter, we describe the structure of a line chart, show you how to create one, and explain how to use one as you make investing decisions.
What Is a Line Chart?
A line chart shows the direction of the closing price. This quickly gives the stock-chart reader a view of the price trend. A trend is established by continually lining up prices side by side and connecting the dots. Because the closing price for a stock is the most important price, the ...
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