Why Do We Still Need To Read Charts?

Some real hardcore retail Value investors will argue charts are not helpful and they don’t care about charts as holding the stock for long term makes charts irrelevant.

But to the rest of us charts are the best way to judge the emotions and psychology in the market as stock prices are primarily driven by investors' sentiment. Stock prices move because of what the Big Boys (Market Sharks) are currently feeling and thinking, and not just because of the fundamental numbers that have been released to the market.

The stock market is never a level playing field and will never be. The Sharks will always be more connected, better informed, and mostly likely jump in ahead on the rest of us. When they act, stock prices move, and the movement can be so drastic that leave you with your mouth open wide. But these Sharks will leave behind their footprints on a stock chart when they move and for you to study how other sharks will move.

Price and Volume Action

Basically by watching the chart for price and volume action, we may have ideas of what the Sharks are doing. When a stock price moves on a big surge in the volume and it is telling us that a lot of investors have suddenly become interested or disinterested and desperately want to get in or get out.  And if you happen to be holding the same stock that is experiencing drastic price movement; it is sooner or later you will be either smiling or weeping.