Method used by a technical analyst to evaluate market trends and price behavior of individual securities. Standard & Poor's Trendline is one publication providing charting information on many securities. In order to interpret charts the analyst must be able to evaluate chart patterns (e.g., head and shoulders) and detect buy and sell indicators. Three basic types of charts are line, bar, and point-andfigure.
Charts can reveal whether the market is in a major upturn or downturn and help analysts predict whether the trend will reverse. The analyst can see what price may occur on a given stock or market average.
Further, charts help to predict the magnitude of a price swing.

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Dictionary of Accounting Terms. Copyright © 2010 by Barron's Educational Series, Inc. All rights reserved.

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