A normal business day during which trades can be made on the JSE – usually from 9am until 5pm. There are approximately 250 trading days in the year and 22 on average per month. End-of-day’s data shows a share’s high, low, open, close and volume traded for the close of each trading day. This can be displayed as a bar chart, or more commonly these days a candlestick chart. Most charts use this data to calculate technical indicators like the moving average or the overbought/oversold. At the end of the trading day you can look at what happened in each share that interests you. You want to know the “range” of trade – from the highest to the lowest price because this will give you an idea of the share’s stability and how certain investors are about it. You can also see how this compares to the previous day. It is also useful to look at where exactly the share closed within that range. In general, if it closed at or close to the top of its range it will probably open strongly on the next trading day – and vice versa. An unusually wide trading range indicates that there is some uncertainty among investors about the future direction of the trend. Candlestick charting offers a number of useful interpretations of particular daily patterns. Consider the chart below:

trading day

JSE Overall Index (J203)

Here you can see a clear “hammer formation” which has a very long downward shadow and is a strong indicator of the bottom of a trend or cycle.

The volume traded can also give an idea of how important the day’s trade has been. Very high volume shows that there was great interest in the share’s activities and vice versa. You need to study candlestick charting to get a good idea of how to interpret the daily market action.

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