Reading Stock Charts

Introduction to Candlesticks- How to read them

The Japanese began using technical analysis to trade rice in the 17th century. While this early version of technical analysis was different from the US version initiated by Charles Dow around 1900

Candlesticks in a graph of chart may be shown in black & white combination or Red & green combination.

• White or a Green candle symbolizes that stock closed positively/ higher compared to its yesterday's previous trading day's closing price.

• Inversely, a black or a red candle symbolizes that stock closed negatively/ lower compared to it's yesterday's/previous trading day's closing price.

Some significant candlestick patterns:

1.  Open price and low price of day is same and stock closes at day high = Most bullish candle
2. the 2nd most bullish candle is when, stock wen low nad buyers rushed in and bought shares pushing the close to day high.
3. The 4th Candle in the chart is inverse of the 2nd but still the stock managed to close positively!
4. The 11th, 12th & 13th candles are formed when there is movement in the stock but ultimately it closes at the same opening level, forming a 'Doji candle'