What Is a Weekly Chart?
A weekly chart represents the data series of price movements for traded securities. Every candle, bar, or point on a line on a weekly chart indicates the price summary for a particular trading week. The two most popular chart styles traders and investors use are bar charts and candlestick charts.
The high, low, open, and close for a given week are shown on a weekly chart when configured to display in a weekly time frame; daily trading moves within that week are not displayed.
Daily and weekly charts may be compared.
Understanding Weekly Charts
Technical analysts utilize weekly charts to determine an asset’s long-term trend. The kind of chart an analyst decides to employ might affect how a weekly chart looks.
On the other hand, a weekly candlestick chart will show the open, high, low, and close for the week, but a weekly line chart could show the weekly closing price. Because this chart layout incorporates a lot more historical price movement than a day chart, it provides a long-term picture of the securities. Weekly charts are often used with daily and volume charts on a trader’s display.
Each week’s worth of data is summarized in weekly charts. Regardless of the day they traded that week, the high and low prices from those five trading sessions became the weekly marker’s high and low.
The graphic above illustrates how a single candle is created from the week’s worth of each day’s data. The final weekly candle nets the trading activity into a single little body with a broad trading range; it doesn’t resemble any other daily candle. But that’s all the information needed for those reviewing a weekly chart.
Benefits of Weekly Charting
Traders may observe price patterns in securities more broadly using weekly charts instead of the hourly or daily price action seen in daily or intraday charts. A weekly chart implies that any prediction from it will last a month (or many months) since it can display a year’s activity in only 52 candles or bars. Weekly charts are more likely to be relevant to the information that institutional analysts seek since they are more interested in longer-term possibilities than short-term traders.
Weekly charts may be combined with daily charts to validate price patterns and buy/sell signals. Weekly charts may be used to determine price channels with bullish and bearish tendencies, just as daily charts. Specific indicators may vary from daily price charts or aid in validating conclusions drawn since they visually represent prices over a more extended period.
Less active investors may also use weekly charts to track and detect long-term price patterns in the stocks they monitor. Many investors check the weekly charts of their assets to look for indications that the investment may be starting a slump or for changes in long-term patterns.
Particular Points to Remember
Investors of all stripes are also free to choose to follow monthly charts. Since prices are plotted monthly, monthly charts will provide a more comprehensive picture of securities. A moving average of the prices overlaid on a price chart might also be helpful. Regardless of the time range they trade, technical traders pay careful attention to moving average research. Those who invest for more extended periods and want to track the price of their investments on a weekly or monthly chart may find the moving average and moving average envelope channels helpful.
Conclusion
- The primary data points from each day’s trading sessions are compiled into weekly charts.
- Charts in this time range are typically used for longer-term forecasting and analysis.
- Weekly charts are a handy tool for investors and analysts to see the long-term trend of an asset since they can easily present one to two years of data at a time on the screen.
