A stock chart shows the historical price movement of a share or ETF over time. Reading a stock chart is a fundamental skill for anyone investing in individual ASX shares — it shows you at a glance how a security has performed, how volatile it is, and how it has reacted to market events. This beginner’s guide explains the key elements.
The Basic Price Chart
The most common view is a line chart — a single line connecting the closing price of a share each day, week, or month. It gives a clear picture of the overall trend but does not show intra-day movement.
What you see on a standard ASX price chart:
- X-axis — time (days, months, years depending on the timeframe selected)
- Y-axis — price in AUD
- The line — closing price at each point in time
Zoom out to see the long-term trend; zoom in to see recent volatility.
Candlestick Charts
A candlestick chart shows more information than a line chart — for each period (day, week), it shows the open, high, low, and close price.
Reading a single candlestick:
- Body — the filled rectangle. Shows the range between open and close price
- Wick (shadow) — the thin line above and below the body. Shows the high and low prices during the period
- Green/white candle — price closed higher than it opened (positive period)
- Red/black candle — price closed lower than it opened (negative period)
Candlestick charts are useful for identifying patterns and understanding price behaviour within each period.
Volume
Below most charts, you will see a volume bar — how many shares changed hands during each period. Volume provides context:
- High volume on a rising price — strong buying conviction, often a more reliable signal
- High volume on a falling price — heavy selling pressure
- Low volume — fewer participants, price moves may be less meaningful
- Spike in volume — often accompanies news events (earnings announcements, takeover bids)
Moving Averages
A moving average smooths out price fluctuations to reveal the underlying trend. Commonly shown as a line overlaid on the price chart.
| Moving average | What it shows | Common use |
|---|---|---|
| 20-day MA | Short-term trend | Short-term trading signals |
| 50-day MA | Medium-term trend | Trend confirmation |
| 200-day MA | Long-term trend | Bull/bear market identification |
A share trading above its 200-day moving average is in a long-term uptrend. When the 50-day MA crosses above the 200-day MA, it is sometimes called a “golden cross” — historically associated with continued upward momentum (though not a reliable predictive signal).
Timeframes
Most chart platforms (CommSec, SelfWealth, Yahoo Finance) let you select different timeframes:
| Timeframe | Best for |
|---|---|
| 1 day (intraday) | Short-term traders |
| 1 month | Recent trend |
| 6 months | Medium-term trend |
| 1 year | Annual performance context |
| 5 years | Long-term trend, major market events |
| 10+ years | Full market cycle context |
For long-term investors, the 5-year or 10-year chart is most useful — it shows how the company performed through different economic conditions.
Support and Resistance Levels
Support — a price level where the share has historically bounced back up after falling to it (many buyers at this price)
Resistance — a price level where the share has historically stalled or fallen back from (many sellers at this price)
These levels are visible on charts as recurring highs or lows. Some investors use them as entry/exit signals, though their predictive reliability for individual stocks is debated.
Important Caveat for Long-Term Investors
Technical analysis (chart reading) is primarily used by short-term traders. For long-term investors — those buying and holding ETFs or quality companies for 10+ years — fundamental analysis (company financials, earnings, competitive position) and valuation matter more than chart patterns.
Understanding charts helps you read a price history and spot context around major events — but chart reading alone is not a reliable basis for investment decisions.
Where to Access ASX Charts
- ASX website (asx.com.au) — free price charts for all listed securities
- Your broker’s platform — CommSec, SelfWealth, Superhero all provide charts
- Yahoo Finance / Google Finance — search by ASX ticker
- Tradingview — advanced charting with technical indicators
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Frequently Asked Questions
Is chart reading (technical analysis) useful for long-term investing? Charts show price history clearly and help you understand how a stock has behaved through different market conditions. However, academic research consistently shows that technical analysis (predicting future price from chart patterns) has limited reliability for generating returns above market averages, especially after transaction costs. Long-term investors are better served by understanding the business behind the share than by chart patterns.
What does it mean when a stock is at an all-time high? An all-time high means the current price is higher than at any prior point in the stock’s listed history. It sounds alarming to buy at a high — but great companies regularly set all-time highs as they grow earnings over time. The overall ASX 200 regularly sets new all-time highs over long periods. Avoiding investments simply because they are at highs often means missing strong long-term performers.
What is a 52-week high and low? The 52-week high and low show the highest and lowest prices a stock has traded at over the past 12 months. Most stock charts and broker platforms display these prominently. They provide context for where the current price sits relative to its recent range.
This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser. You can find one through the ASIC financial advisers register or MoneySmart.