How to Read a Stock Chart: A Beginner's Guide

What Does a Stock Chart Show You?

A stock chart is a visual history of a stock's price over time. The horizontal axis shows time (days, weeks, months), and the vertical axis shows price. The most common chart style is the candlestick chart, where each "candle" shows the open, close, high, and low price for a given period.

A green candle means the stock closed higher than it opened — buyers were in control. A red candle means it closed lower — sellers won that day.

What Are Moving Averages and Why Do They Matter?

A moving average smooths out daily price noise so you can see the actual trend. The most common ones are the 50-day MA and the 200-day MA.

• Price above the 50-day MA = short-term bullish momentum
• Price below the 200-day MA = possible long-term downtrend
• 50-day crossing above 200-day = "golden cross" — a strong buy signal

BrixNation's Market ETF Monitor uses 50, 100, and 200-day moving averages to score every major ETF on a 0–100 sentiment gauge — updated daily.

What Is RSI and How Do You Use It?

RSI (Relative Strength Index) measures how overbought or oversold a stock is on a scale of 0–100. Below 30 means the stock may be oversold and due for a bounce. Above 70 means it may be overbought and due for a pullback.

RSI is most useful when combined with price action — a stock hitting RSI 28 while sitting at a major support level is a much stronger signal than RSI alone.

What Is Support and Resistance?

Support is a price level where a stock has bounced up from multiple times — buyers step in there. Resistance is a ceiling where the stock repeatedly stalls — sellers show up there. When a stock breaks through resistance, that old ceiling often becomes the new floor.

KEY TAKEAWAY: Focus on three things first — is the price above or below its 200-day moving average, is RSI above or below 50, and is the stock near a support or resistance level? Those three answers tell you most of what you need.