A weekly chart is a technical price chart where each data point is comprised of the price movement for a single week of trading. This type of chart will show high, low, open, and close for the whole week and does not show the day-to-day movements of the security. This type of chart is used by technical analysts to gauge the long-term trend of a given asset.
A weekly chart can vary in appearance depending on what form of chart the analyst chooses to use. For example, a weekly line chart may only include the weekly closing price while a weekly candlestick chart will display the open, high, low and close for the week. This chart construction is used to give a long-term view of the security as it includes much more historical price movement than an equivalent period day chart. Oftentimes, weekly charts can be added to a trader’s display and used in comparison to daily charts and volume charts.
Weekly charts can help traders to view security price trends from a broader perspective. They can be used in conjunction with daily charts to confirm price trends and buy/sell signals. Similar to daily charts, weekly charts can be used to identify price channels with bullish and bearish trends. Since they provide a visual display of prices over a longer time, some indicators may be different than daily price charts or may help to confirm daily price chart pattern inferences.
Weekly charts may also be used by less active investors to follow and identify security price trends in the financial markets. Many investors will view weekly charts on the security’s they are invested in to watch for long-term trends or signals that the investment may be potentially beginning a downtrend.
All types of investors and especially long-term investors may also choose to follow monthly charts. Monthly charts will show an even broader view of a security with prices charted monthly.
Using weekly and monthly charts, a long-term investor is able to spot longer term trends with peaks and troughs used as potential selling and buying points. In all instances it can also be helpful to overlay a security price chart with a security’s moving average trendline. Moving average trendlines are followed closely by day traders and used to developed envelope channels such as Bollinger Bands or a Keltner Channel. The moving average and envelope channels can also be useful for passive investors who wish to follow their investment’s price in a weekly or monthly chart.