Tag Archives: TSLA

How to Read Stock Charts

Although I aim to invest in fundamentally sound companies, I will use technical analysis techniques to help me determine when to buy or potentially sell a stock.

Today, I’ll go over some recent examples of technical charts of growth stocks: Tesla (NASDAQ: TSLA), Amazon (NASDAQ:AMZN), and JD.com (NASDAQ:JD). But these are techniques that you can apply to any stock chart, including dividend stocks

There’s a lot of information here. So, it’s probably better to watch the YouTube video instead and pause it whenever you need to. However, in case you prefer a blog version, here it is:

JD Stock Chart Reading

JD’s recent technical chart is beautiful and perfect learning material so I’ll start with this one.

JD stock chart showing stock bottoming, making higher lows, and breaking out
Figure 1. Source: Stockcharts with author annotation

Figure 1. It bottomed and then consolidated with higher lows before breaking out from the resistance that was marked by its 200-day simple moving average (or SMA) that’s in red.

JD stock chart showing potential bottom signal with relative strength index 30, moving average convergence divergence lines, and consolidation before breaking out above a long-term simple moving average.
Figure 2. Source: Stockcharts with author annotation

Figure 2. Notice that two indicators suggested a potential bottom. First, the Relative Strength Index (or RSI) hit below 30 (so the stock was oversold) and it eventually rose above the 30 mark.

Second, the Moving Average Convergence Divergence (or MACD) had the black line crossing above the red line, which indicated a change in direction of the stock.

The bottom was finally confirmed when JD stock climbed above the 50-day SMA, and it consolidated to eventually break above the long-term SMA.

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