Stock chart evaluation has become the most significant tool in successful stock investment. You can easily master the stock charts! A stock chart is a collection of many factors that go into constituting an investment decision. The thorough knowledge that is required to earn handsome money on the stock market can only be made possible by mastering the stock chart. The professional stock investor carefully analyses the charts before committing his money in the stock market.

A stock chart can answer the following questions:
• Is the stock at the beginning, mid, or end of a trend?
• If there is a trend, then how strong or weak is that trend?
• What stage is the stock in?
• Is there an upward trend or a downward trend?
• What are the moving averages?
• Can there be a breakout in the near future?
• Does the chart show any definite pattern?
• Does the chart show any gaps in the direction of the trend?
• Are there any support or resistant levels?
• Is the stock facing any selling strength or buying weakness?

Too much knowledge is concealed inside the chart. When you analyze a chart, all the above questions - and many more - needs to be answered to arrive at a skillful decision. The knowledge and the answers will disclose a final picture about any chart without involving emotions.

With practice, reading a chart can become habitual and easy. You can make masterful financial decisions within seconds!

What are stages?

Stage one is consolidation. Stage two is an uptrend. Stage three is another consolidation. Stage four is a downtrend. Stage determination will be a major factor for stock related decision making.
What is an Elliott Wave theory?

A stock goes through 5 waves in an uptrend. Reading a chart becomes easier if a correct Elliott Wave determination is made.

A chart analysis is never complete without the price, indicated by the candles. You then need to see if there are gaps in the chart. Check to see if there was any recent gap in the chart. Stocks have the habit of moving in the direction of the gaps!

There is another important consideration to observe. It is the presence of a “shadow” or a “tail” at the bottom of the candle. It indicates that the professionals are buying out the weakened stock for supporting the stock from moving downwards. The volume indicates that there is public interest in the stock.

The trend lines are important too. They are one of the simplest and most effective charting tools. Uptrend lines are drawn along two successive lows. The downtrend lines are drawn along two successive peaks. Price of the stock usually is pulled back to the trend lines and then they resume the trend. If you encounter a break in the trend lines then it is a strong indication of a change in the trend of the stock.

There are many more indicators to follow and the chart can display all those indicators to a trained eye! It becomes an art once you can master those details concealed inside a chart. With the mastery of the chart-reading will come the mastery over the decision-making in the stock market investment!
The great stock analyst, John J. Murphy, has once said:

“Technical analysis is a skill that improves with experience and study. Always be a student and keep learning.”