This page will help you to better understand how to read and find potential trades using the StockChartsAI.com AI powered stock charts.
When viewing a chart, you will see Green, Yellow and Red colored candlesticks. Green candles mean the stock is experiencing upward forces an the probability is that the stock will move up. Yellow means the stocks movement is in transition - down to up or up to down. For example, if a stock is in a green zone and enters a yellow zone it can mean the stock may be getting ready to turn red and trend down or it can mean that the stock's movement is consolidating and may move higher. Red means that the stock is likely to move in a downward direction.
On some charts, you will see large yellow down arrows, which mean that the AI is sensing that the stock might be nearing a near term top. This would be a point to consider profit taking or consider closing a trade. However you should understand large yellow arrows in a strong green trend can signal a dip and continuation move upward.
There are also large green up arrows on some charts. These arrows signify that the AI is sensing that the stock might be nearing a near term bottom and can often be followed soon by a green zone on the AI powered stock chart.
You will also see a gray box on the charts. The gray box indicates a 30 day range where the stock has been trading. Top of the box can be resistance, but if a stock breaks out of the top, on heavy volume, can lead to a strong up trend. The bottom of the gray box can be price support, and if a stock breaks below the bottom of the box it can lead to a down trend.
Finally, you will see different lines on the chart. Red lines on the chart represent key price overhead resistance levels and Green lines represent key price support levels. As the price moves above the lines you will notice they turn green and red if price moves below a support resistance line.
So let's put all these colorful tools together with some examples.
Below is a chart of SPDR S&P 500 ETF Trust (SPY). If you look at the bottom left of the chart, you will see at the end of May 2023 that SPY was in a green zone on the AI powered. Then on Aug 1st., a large yellow arrow appears on the chart signaling the AI senses a near term top at $457. The AI powered chart then turns red on Aug. 15th at $442. SPY then trades down to about $439 where a large green arrow appears. SPY then trades up to $450 where a large yellow arrow appears marking a near term top. Spy then trades down to $410 where a large green arrow appears and then the Ai powered chart turns green on Nov. 2nd. at $430 and trades up to $476.
Make sure before buying a stock you understand if it is green or red on the long term AI powered stock chart. When buying stocks betting they will go up, you will be WAY more successful if they are in a long term green zone. The long term chart of each stock is under the short term AI powered stock chart on the chart page. Looking at the SPY long term AI powered stock chart below, you will see the SPY was in a green zone (green up arrow) on the chart during both of the significant moves discussed.
Below is a chart of Dominos Pizza (DPZ). If you look at the bottom left of the chart, you will see in May 2023 that DPZ was in a downtrend red on the chart. You will then notice a large green arrow appears signifying that the stock is close to a near term bottom on June 9th. Then on June 15th, the AI powered stock chart turns green at $325, there is a volume spike and the price breaks out of a recent range. The stock proceeds to run up to $405 - about a 20% gain.
At about the $397 level, you will see a large yellow arrow above the price - this means the AI senses the stock is nearing a short term top. You can also see the price flattens out at the red line of price resistance. Eventually the stock fails to get above the $400 level and the AI signal turns red on Sept. 20. The stock then trades down to $340. On Nov. 1st, a large green arrow appears as the AI thinks this may be a near term bottom. On November 3, the AI chart enters a green zone and starts a new uptrend.
You will notice that after DPZ turned green again on Nov. 3rd, the stock proceeded to run back to the $415 level and then a large yellow arrow appeared again on Jan. 2nd. signaling a possible near term top. Even though the AI chart is still green, taking profits here would be smart as the chart appears to be starting to roll over at the overhead resistance at about $413.
Below you will see DPZ long term AI powered stock chart. DPZ was in a long term green trend during both of the big moves discussed above.
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