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Practice

Read a stock chart: time period, starting point and price basis

A stock chart shows selected prices over a period. Before interpreting its line, establish what the axes, starting point and endpoint mean. The same series can show a rise over one period and a fall over another. The chart in this lesson is entirely fictional. Prices use Swedish kronor, labelled SEK.

What you will learn

  • Identify which time and price observations are shown.
  • Calculate the price change over two different intervals.
  • Distinguish chart observations from dividends, your own return and a forecast.

Begin with the axes and the data

The horizontal axis shows four fictional observations, A to D. The vertical axis shows SEK per share and starts at zero. The points were chosen for the exercise, not taken from a company. Lines join the observations; we have no prices between them.

For a real chart, check the dates, currency and whether the observations are, for example, closing prices. More frequent observations may reveal movements a coarser chart hides. A chart of daily closing prices does not automatically show everything that happened within each day.

Fictional price series A–D, SEK per shareA: 80 SEK per share; B: 120 SEK per share; C: 100 SEK per share; D: 110 SEK per shareSEK per share
Fictional price series A–D, SEK per share

If the table does not fit, scroll it sideways.

The same invented prices as in the chart
ObservationPrice
ASEK 80
BSEK 120
CSEK 100
DSEK 110

The same endpoint with different starting points

From A to D, price rises from SEK 80 to SEK 110. The change is (110 − 80) ÷ 80 × 100 = 37.5 percent. From B to D, it falls from SEK 120 to SEK 110: (110 − 120) ÷ 120 × 100, approximately −8.33 percent.

Both calculations are correct for their intervals. The data does not contradict itself. The starting point and value differ. State the full period when comparing two claims about performance; saying the share went up does not give enough information.

If the table does not fit, scroll it sideways.

Three intervals from the same fictional series
IntervalStart → endPrice change
A to DSEK 80 → 110+37.5 %
B to DSEK 120 → 110Approximately −8.33 %
C to DSEK 100 → 110+10 %

Check whether you are comparing the same thing

Two lines need the same interval and a comparable method to make a clear percentage-performance comparison. A higher price in SEK does not by itself mean that a share has performed better. That also depends on the price at the start of the comparison.

Ask whether the chart shows only price or also counts dividends. Check how a split affects older prices. Our fictional series shows price only, without dividends or a split. It should therefore not be presented as total return or as an actual result in your account.

State what the chart shows and what you do not know

Practise a checkable statement: between C and D, the displayed price rose from SEK 100 to SEK 110. Then record what you cannot determine from the line, such as why the change occurred or what the price will be after D.

Past results do not guarantee future results. Connect chart observations to questions rather than certain forecasts. Investiq's guide explains market data and practice with virtual money. This series works without an app account to help you practise a clear comparison.

  • Check the start, end and observation frequency.
  • Read the currency and scale on the price axis.
  • State whether the graph shows price or a return measure.
  • Separate an observed change from an explanation or forecast.

Try it yourself

Use the table: how does price change from B to C, and from A to C? Explain why the results differ despite the same endpoint.

Show the solution and explanation

B to C: approximately −16.67 percent. A to C: +25 percent.

(100 − 120) ÷ 120 × 100 ≈ −16.67. (100 − 80) ÷ 80 × 100 = 25. The ending price is the same, but the starting price and comparison base differ.

Check your understanding

Does the line tell us the prices between A and B?

Not in this exercise. We have only four observations. The straight connecting line is a way to draw them, not extra measured prices.

Can you read the future price after D from this chart?

No. It only shows the selected observations and supplies no future price.

Practise with virtual money

Try what you just learned in a practice portfolio with virtual money. You don't deposit any real money.

How the practice portfolio works

More lessons on this topic

Sources and examples

The sources support the factual explanations. Calculations and exercises were created for this lesson. Amounts and price changes are invented unless stated otherwise.

This material is educational and does not recommend securities to buy. A simulated result does not guarantee a future result.

Practice now. Invest later.

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