Typically, a chart consists of vertical bars that plot the stock's price range for a day, or a week, depending on the type of chart you use, and a short horizontal bar that marks the closing price. In the example below, a daily chart is used. With each subsequent day, or week, another price bar is added, forming the stock's trend over time. Usually, you'll see corresponding vertical lines underneath the price bars. These are volume lines, representing the number of shares traded for the day or week. Volume indicates supply and demand, and how strong a trend is or how likely it is to continue. The most helpful charts span nine to 12 months of trading activity. You can miss the bigger picture if you use charts of shorter length. IBD Charts include a line across the volume bars that depicts the 50-day moving average for the stock's trading volume. Also, charts show the 50-day and 200-day moving averages as well as the Relative Strength line. The RS line shows the stock's performance relative to the S&P 500 index. An upward-sloping line indicates the stock's price is climbing faster than the S&P 500.

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