Historical stock charts

Why and how to analyze them

Do you check historical stock charts regularly ? I think that every trading or investing decision should be based on knowledge of historical stock market data.

Why? They will help you identify major levels of support and resistance .

My basic rule for support and resistance levels is that such level found on longer time frame (like monthly or weekly) is much more important than support or resistance level found on small time frame (daily or intraday).

What are good time frames for historical stock charts ?

I personally use 3 basic charts when I do study of historical stock market data.

Monthly time frame

It is longest time frame I use. Here I monitor most critical levels of support and resistance only.

This mid term time frame helps me to identify good trading opportunities Here I can see how is stock acting near important support or resistance. It also signalize best possible values for stop loss .

This is my shortest time frame. I use it for precise selection entry point .

I like to see basic stock chart patterns on these time frames. Like flags or head and shoulders stock chart patterns .

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