Building a Chart Reading Routine
Building a Chart Reading Routine
Learning to read charts is one thing; doing it consistently is another. The investors who benefit most from chart analysis are those who build it into a regular routine. Like any skill, chart reading improves with practice. Here is how to build a daily and weekly habit that sharpens your skills and keeps you informed about the NSE.
Daily Chart Check (5-10 Minutes)
Every trading day, take a few minutes to review the key stocks in your portfolio or watchlist. Here is a simple checklist:
- Price action — Did the stock go up, down, or stay flat? How does today's candle look?
- Volume — Was today's volume higher or lower than average? Does it confirm the price move?
- Key levels — Is the stock approaching support or resistance? Did it break through any key level?
- Moving averages — Where is the price relative to the 50-day and 200-day SMA?
Weekly Review (15-20 Minutes)
Once a week, spend more time on a deeper review:
- Review the weekly chart — Switch to the weekly timeframe and assess the broader trend for each stock in your portfolio
- Scan for patterns — Are any of your watchlist stocks forming recognisable chart patterns (triangles, double bottoms, head and shoulders)?
- Check the market indices — How are NASI and NSE 20 trending? The market environment affects individual stocks.
- Update your notes — Write down key observations: support/resistance levels, pattern formations, and any signals you spotted
What to Look For: A Quick Summary
- Trend direction — Is the stock in an uptrend, downtrend, or range?
- Key levels — Where are the nearest support and resistance levels?
- Volume confirmation — Are price moves backed by volume?
- Moving average signals — Any Golden Cross or Death Cross forming?
- Candlestick and chart patterns — Any reversal or continuation signals at key levels?
Keep Improving
The more charts you read, the better you get. Start by practising on the most liquid NSE stocks — Safaricom, Equity, KCB, EABL, and Co-operative Bank — where price action is clearest. Over time, you will develop an intuitive feel for what a chart is telling you.
Congratulations on completing Chart School! You now have a solid foundation in reading stock charts. Use these skills alongside your fundamental analysis to make more informed decisions on the NSE. Happy investing!