How to read stock charts (UK guide)

The simplest chart joins up each day's closing price. Reading it well means ignoring single days and looking for the direction of travel: a series of higher highs and higher lows is an uptrend; lower highs and lower lows is a downtrend. Everything else on a chart is a way of double-checking that first impression.

Always match your read to the time range. A share can be climbing over a year while falling over a week — on each ticker page here you can switch between 7 days, 30 days and 1 year, and the performance figure beside the price follows the range you pick.

A candlestick packs four prices into one shape: the day's open, close, highest and lowest trade. The thick body runs from open to close — on this site it is green when the share rose over the day and red when it fell — while the thin “wicks” show how far the price stretched before settling.

Long bodies mean decisive buying or selling; long wicks mean the market tried a level and was pushed back. You don't need to memorise dozens of named patterns — bodies and wicks tell you most of the story. Candlesticks are optional here: switch them on in Settings under Chart style; the default view is a plain line.

A moving average smooths the price by averaging the last so many days — a 5-day average on the short view, longer averages on wider windows. When a short average crosses above a longer one, momentum is shifting up; crossing below suggests the opposite. It is one of the oldest signals in trading and one of the factors in the signal model used across this site.

Volume is the number of shares that changed hands. A price move on heavy volume has real money behind it and is more likely to hold; the same move on thin volume often fades. When a chart jumps, the first question to ask is whether volume jumped with it.

The Relative Strength Index runs from 0 to 100. Above roughly 70 a share is described as overbought — it has run up fast and may pause; below about 30 it is oversold. RSI doesn't tell you when to act on its own, but it flags stretched moves that deserve a second look.

A share rising 3% while the whole market rises 4% is actually lagging. London shares are best read against the FTSE 100 and US shares against the S&P 500 — both are shown live at the top of the UK and US pages. Strength only counts when a share beats its index.

Open any ticker page — for example a FTSE 100 name such as Shell (SHEL.L) or a US name such as Apple (AAPL) — and try reading the chart before you look at the verdict. Then compare your read with the model's BUY, HOLD or SELL and its confidence percentage. If you want the short version of when to act on signals like these, see when to buy and sell stocks.