Stock charts can be drawn in two different ways. It has equal vertical distances between the same percentages of price growth. For this reason, the vertical distance from 10 to 20 and the vertical distance from 20 to 40 will be identical on a logarithmic chart. 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.