What Is a Weekly Chart?
A weekly chart is a visual data series illustrating the price actions for a traded security over each week. On a weekly chart, every candle, bar, or point on a line encapsulates the price summary for an entire week of trading. Candlestick charts and bar charts are among the most commonly used by traders and investors.
A weekly chart, when set to a weekly timeframe, displays the high, low, open, and close for the entire week, but it does not show the individual daily trading movements within that week.
Weekly charts can be contrasted with daily charts, but they offer unique insights for longer-term analysis.
Key Takeaways
- Weekly charts highlight the critical data points from all the daily trading sessions within a week.
- This timeframe is generally associated with long-term forecasting and analysis.
- Weekly charts comfortably display one to two years of data on a single screen, making them a convenient tool for analysts and investors to identify long-term trends.
Understanding Weekly Charts
Weekly charts are utilized by technical analysts to assess the long-term trends of assets. The appearance of a weekly chart may differ based on the form chosen by the analyst.
For instance, a weekly line chart may only reflect the weekly closing price, whereas a weekly candlestick chart presents the open, high, low, and close for the week. This construction offers a more extended view of the security because it encompasses far more historical price movement than a daily chart over the same period. Often, weekly charts can be integrated with daily charts and volume charts for a comprehensive analysis.
Weekly charts aggregate data from all the trading days of the week. The highest and lowest prices during those five trading sessions determine the high and low for that week’s marker.
Image example of a weekly chart summary.
The illustration above shows how data from each individual day of the week is summarized into a single weekly candle. The weekly candle appears different from any individual daily candle, summarizing the week’s actions into a small body with a larger trading range. This consolidated information is valuable for reviewing long-term performance trends.
Advantages of Weekly Charts
Weekly charts provide traders with a broader perspective on security price trends compared to daily or intraday charts. With a weekly chart showcasing a year’s worth of trading in just 52 candles, the trends and patterns identified are likely to last several months, making forecasts more reliable for long-term planning.
Institutional analysts seeking longer-term opportunities prefer weekly charts for their strategic insights. These charts can complement daily charts by confirming price trends and buy/sell signals. They can also define price channels with bullish and bearish trends clearly.
Less active investors also benefit from weekly charts to monitor and identify long-term price trends in their portfolios. By viewing weekly charts, investors can detect changes in trends or spot signals indicating potential downtrends.
Special Considerations
Investors might also follow monthly charts for an even broader overview. Monthly charts, which track prices each month, provide an extended view of price movements. Overlaying a price chart with a moving average can enhance analysis regardless of the timeframe. Both moving average and moving average envelope channels are favored by long-term investors to follow their investments.
Related Terms: candlestick charts, bar charts, line charts, moving average, volume charts, daily charts, high and low prices, closing price, downtrend.
