Investment Guide

Powerful Technique to determine if the price is an UPtrend

On this post we will give a guide how you can tell if the stock price is in uptrend using price chart.

But before that, we will cover first how to read or interpret OHLC or Bar Chart. We will use this kind of chart because it very easy to understand.

Bar chart

Bar charts are some of the most popular type of charts used in technical analysis. As illustrated on the left, the top of the vertical line indicates the highest price a security traded at during the day, and the bottom represents the lowest price.

The closing price is displayed on the right side of the bar and the opening price is shown on the left side of the bar. A single bar like the one to the left represents one day of trading.

If the line is RED, if means stock was down for that day. It means the closing price was low compare to it’s opening price.

On the good side, if the line is GREEN, it means it was up for the day. The closing price was higher than its opening price.

Now your question is, using Bar chart, how can I determine if the price is in up trend?

Below are the two things to consider:

  1. Higher Highs – when the highest price of today is higher than the higher price of the past few days. A series and higher high is indicator that the stock is doing great.
  2. Higher Lows – this is the next things to consider. When the lowest price of today is higher than the previous lowest price. This is additional confirmation that the stock is doing great and continue to goes up.

HINT #1: If you have higher highs and higher lows for the three consecutive days, it is not necessary that the Day 4 will deliver also the higher highs and higher lows. Stocks did not move in straight line. You have to remember that. And you have to consider that when buying stocks.

HINT #2: You can also use this to weekly and monthly month.

To better illustrate the higher high and higher low, consider the example below:

Higher high chart

The higher highs and higher lows was clearly illustrated in the above example. I have put it in a circle to better explain.

Now, let’s apply it to the real world. Take a look some chart below to prove that it is working.

ABS 5 year weekly chart

Above is a ABS 5 year weekly chart. If you will look at the chart, you can see that the price is an uptrend if they have higher highs and higher lows.

Take a look another example, below is SM 5 year weekly chart. Almost the same are saying when they have higher highs and higher lows, and it is an uptrend price.

SM 5 year weekly chart

 

 

To your next winning stocks,

Polunio

 

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31 thoughts on “Powerful Technique to determine if the price is an UPtrend

    1. Glad to hear your interested in stock market. You can read the other articles here. Then you can send me an email if you have any questions.

  1. Greetings! I just would like to ask if you have any journals related to the strategies in determining future prices which are available for further studies? Your response is highly appreciated. Thank you!

  2. im just an 18 yr old student from UST, i am willing to learn more about stocks =) and I am a newbie investor can you help me thank you

    1. Hi William, tnx for dropping by.. Happy to hear that you are willing to learn more about stock market at your young age.. First, just decide what is your goal, it will guide thru your investing in stock market.. Also, PSE and other online broker is conducting a free seminar, i would suggest you to attend that seminar.
      Just send me an email if you have any questions..

      1. goodmorning po, i already invested 5k php, what is your email address 🙂 i can’t attend the free seminars because my class schedule is from mon-saturday

    1. Good thing, I came across Pinoy Stock Journal, if not, I sold my stock losing!
      Am using your Tips…thank you and GOD BLESS!

    1. thank you so much for the info, this must be a very useful tip…! Using this tip,
      can I say that The price of NOW is still on an upward?

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