Stock chart analysis can be applied equally to individual stocks and major indices. On individual charts, investors and traders can learn the same thing about their favorite companies. Trends Use the stock chart to identify the current trend. A trend reflects the average rate of change in a stock's price over time. Trends exist in all time frames and all markets.
Day traders can establish the trend of their stocks to within minutes.
Long term investors watch trends that persist for many years. In an uptrend, a stock rallies often with intermediate periods of consolidation or movement against the trend. In doing so, it draws a series of higher highs and higher lows on the stock chart. In a downtrend, a stock declines often with intermediate periods of consolidation or movement against the trend. In doing so, it draws a series of lower highs and lower lows on the stock chart.