Weekly Stock Charts provide a ton of valuable perspective. This is especially true when the stock market sells off and it feels like you might lose your shirt. The minute to minute machinations of Mr. Market can drive you crazy. So I like to use weekly stock charts to zoom out when times get tough.
Weekly stock charts are a great way to pull your head out of the trenches. And when you zoom out with the weekly view, you’ll usually find things don’t look so bad. Plus, a lot of institutional money managers with huge asset bases key off weekly charts in the first place. So you know weekly stock charts are relevant even if you’re a short-term focused swing trader.
Now let me show you some examples of how I use weekly stock charts…
Weekly Stock Charts Reveal Controlling Technical Pattern
Weekly stock charts are a great way to judge the controlling technical pattern in a stock price. By zooming out and focusing on the weekly chart you can see if your stock is consolidating, topping, or trending ever higher. The long term view provided by the zoomed-out weekly stock chart can be exactly what you need to be reminded of the big technical picture influencing the price pattern of your stocks.
And to be honest…
Sometimes when you’re looking at 5-minute, 30-minute or daily stock charts, it’s easy to get overwhelmed. The stock patterns happening in real time feel like they’re the only thing that matter. But when you take a step back and look at the weekly chart you’ll get valuable context of how the day-to-day price action fits into the larger story of price performance. When you zoom out to the weekly stock chart it will often give a clue as to which price patterns are influencing the shorter-term moves in the stock market. Make sense?
Here’s a super simple example of weekly stock charts showing the dominant trend…
Weekly Stock Charts: Sustainable Turning Points:
Weekly stock charts aren’t just about finding the controlling technical patterns They’re even more actionable that that because weekly stock charts are a great way to find stock market bottoms. Since coming out of a downtrend can be a very bumpy process for most stocks, I like to use the weekly chart to look for a higher low. By zooming out and focusing on the weekly stock chart, I’m able to avoid a lot of the “backing and filling” that makes bottoming such a choppy process for most stock prices. But that’s not the only benefit.
By zooming out and looking for a trend change on the weekly time frame, I also avoid tying up my money prematurely. The weekly chart can help you jump in to bottoms only once they are making meaningful turnarounds (without yet becoming over-valued). Using the weekly stock chart is a great way to avoid putting your money at risk too early.
Keeping an eye on the weekly stock chart is a great way to avoid rushing in too soon and can help you find higher probability entry points. So while I find it very helpful to use weekly stock charts to isolate the controlling technical pattern, finding durable bottoms is the most actionable use I have for weekly stock charts.
So now that you know the value of weekly stock charts, here’s where you can make your own…
Best Source for Weekly Stock Charts:
Luckily finding weekly stock charts on the internet are easy to find. As always, I recommend freestockcharts.com for all of your charting needs. It’s the most robust tool and allows you to look at stock on weekly, monthly and quarterly time frames. This should be enough to get you sufficiently zoomed out!
Additionally, if you’re looking for a lot of advanced technical indicators and analysis, I recommend you check out stockcharts.com. They have a good interface for overlying technical analysis tools, a lot of which are even more meaningful on these longer weekly time frames. Check out this short blog post to learn more about both of these stock chart websites if you’re not already familiar.
So I hope learning how I use weekly stock charts has helped you understand another layer of analysis that goes into the risk management, trading plan and emotional control involved with successfully trading your stock ideas.
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