How To Read Stock Charts

When you start to invest, it may seem almost impossible to read a stock chart. How do you tell what's up or down, and what in the world do you use to determine how well a stock's really doing? First, look for the stock names. It's easy to find the companies a stock name like KG refers to by searching online for it. In the newspaper, stocks printed in bold type are up at least 5% over the previous closing price (only for stocks that have traded at least 500 shares and are closing over $1). Underlined stocks are even more significant; they've traded at 500% or more above their sixty-day average daily volume. Look for up and down arrows; these stocks have reached a new 52-week high or low in trading. The dividend of a stock is awarded to you as a shareholder, so stocks with large dividends are not just investments to hold but actual moneymaking tools. Yield % refers to the annual dividend rate, or the amount paid over the last twelve months as a percentage of closing prices. P/E is the price earnings ratio, calculated by dividing the closing price by the earnings per share. Volume refers to the number of shares traded rounded to the nearest hundred. Associated symbols nt (no trade), z (odd lot), e (exact number of shares) may be found with it. If no trades are done for a stock, the high/ask is the highest trading or last asking price; low/bid is the lowest or last bid price; and close/last is the closing or last board lot closing price in the past 12 months. Net change is the difference between the board lot closing price and previous board lot closing price - really, how much the actual price of a stock has changed. When looking at online charts, you should pay careful attention to the symbols associated with each one, as they may mean slightly different things for each chart provided. SP often stands for split stock, and refers to the point in time that a stock split happened. Before purchasing a stock, try to read stock charts online as well as the ones included in the newspaper and on the company website. Each one may give you slightly different information, and help you to make a more educated decision.

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