What can a person learn besides the obvious from looking at 1 year stock performance charts?

Answer 1

There's lots to learn about a stock from a technical stand point. Many times just by eye-balling it you can see resistance levels, floors, convergence points, etc.. Start here: http://en.wikipedia.org/wiki/Technical_analysis

Answer 2

Paul, I've been doing this for 13 years and I've yet to know that myself...

Some people swear that by technical analysis, they can determine "breakouts" and "resistance" and all sorts of behaviors in a stock by looking at "moving averages" or "Boolean bands" or some other jibberish. The problem is they are ALWAYS looking at the PAST. Sure the past is an INDICATOR of what might reoccur in the future. But it is the FUTURE that I'm really interested in -- and unless you're smarter than Einstein I don't think most people can get technical analysis to be any more predictable than coin flips (personal opinion...).

Fundamental analysis -- P/E ratios, dividend history, EBITDA numbers, etc. -- can usually tell you a little more about the actual mechanics of how a company is doing NOW and how it may perform in the future. It's not a crystal ball either, but I believe it's a better way to understand what a company's future looks like.

Of course, some of it is also just good old fashioned common sense. If you want to know what's going to be an emerging trend in the marketplace, just ask your kids. They may give you a great starting point to research companies in that business.

And of course, ALWAYS hedge your bets. Diversify -- invest in bonds AND stocks, invest in big companies AND small companies (usually through a good mutual fund), invest in the U.S. AND international stocks... Otherwise, staring at a chart looking for the next Microsoft can lead to lots of trouble...

Answer 3

Paul -- Stock performance chart... If XYZ was $20 in 2006 and now it is $100. What did you learn??? When to kick yourself in the pants. You don't own that stock... Past performance is not necessarily a indication of future performance???? Thats about it --- the obvious

Answer 4

It depends on what's obvious to you!

First off I'm assuming you mean a daily chart for one year.

Support, Resistance & Trend would be my first "obvious" answer. I'd also be looking closley at the candles for additional confirmation of entry or exit. I might also look at RSI or Stochastics. I'd look for a channel I could swing trade with.

I also would have a 10, 21, 50 & 200 EMA on the chart (for further confirmation / direction).

But the key here is..... everyone makes their own intrpretation of the chart.

Answer 5

Since big moves typically last 3-6 mos, you can usually find a point where the move (up or down) started. Studying these points can help you identify the next big winner(s) when they are just breaking out.

Answer 6

Nothing. You need to read the 10k's