What are Nifty Charts? How to read and use them?

Stock charts are depictions of the original technical analysis of stocks and other financial instruments. These are prerequisites for understanding candlesticks chart patterns and basis for stock price changes. They offer all the key market information and often form an important addition to base their trades. The Nifty chart is one such representation used for the index representing changes in the Nifty 50 listed on the National Stock Exchange (NSE).

Charts and the market

Market data are often graphically represented in Nifty charts through two methods. The OHLC chart or the candlestick chart type. The latter being more popular among day traders in the stock exchange. Both these charts show the same market data. The data consists of high, low, opening and closing prices for a particular time frame.

OHLC charts


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The open-high-low-close chart (or the OHLC chart) characteristically shows movements in the price of a financial instrument like a stock over time. The vertical lines on this bar chart show the highest and lowest prices over one unit of time. For instance, the price range of the stocks of the Nifty 50 companies over one hour or one day.

Tick marks project from either side of the bars. The tick on the left points out the opening price and the tick on the right side of the bar indicate the closing price for the time period.

The bars are at times in different colours, which indicate whether the stock prices rose or fell during that time period.

The high-low-close chart (or the HLC chart) is a basic version of the OHLC chart. This chart identifies the range of the price action in the time unit. The range is from the highest price to the lowest price. It also captures the end result of this price action or the closing price for that time period.

For technical analysis, OHLC charts are frequently combined with other chart types such as line charts, which show the moving averages, column charts that indicate the trading volume, and range areas, which are called Bollinger Bands.

Candlestick charts


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The market data is also represented in the form of the Japanese candlestick chart. Here, the opening and closing prices of the financial instrument defines a rectangle that lies within this range for a time unit. Each candlestick has a wick. The top of the wick represents the highest traded price.

The bottom of the wick represents the lowest traded price.

The rectangular region in between represents the opening and closing trades.

Digitally displayed candlesticks in charts come in various colours indicating higher closing and lower closing.

It is suitable for Day traders as they show the live action or current price movements, which are indicated by the expansion and contraction of the candlestick’s body. They consider this easier to follow and also trade upon than the OHLC chart.

Accessing them online

There are many finance and stock market-related websites including the official NSE website that have up-to-date information regarding the market performance in these chart types. Apart from financial instruments like securities, it can also show the changes in various indexes like the nifty index.

Apart from being an invaluable source of important market information, market players in the bse and nse consider reading these charts as an art and beginners may need to take advantage of the strategies.

Frequently Asked Questions

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National Stock Exchange Fifty which is termed as Nifty is the market indicator of the National Stock Exchange managed by India Index Services and Products Ltd. There are 50 stocks listed under Nifty but currently there are 51 listed stocks. It is also known as Nifty 50 and CNX Nifty. Nifty is calculated by the free-float market capitalization-weighted method with the help of a mathematical formula.

Equity capital is multiplied by price for deriving market capitalization. For determining the free-float market capitalization, equity capital is multiplied by a price which is further multiplied by IWF, a factor that tells us about the shares available for market trading. The Nifty Index is determined daily by considering the current market value which is divided by base market capital and multiplied with Base Index Value of 1000.

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No, it is not possible to buy Nifty 50 as it is not one stock but an index that comprises 50 different stocks. To invest in Nifty one can invest in exchange-traded funds or index funds. Also, you can invest in Nifty via Derivatives options.

Derivatives: They are financial contracts deriving their value from the underlying asset like stocks, indices, commodities, currencies, etc. Here trading can be done in either Nifty Futures or Nifty Options.

Index Exchange Traded funds (ETFs): are the investment options which are similar to stocks. Many ETFs track a particular index-stock or bond index.

Index Funds: An index fund is similar to the fund where the index fund will track the benchmark indices and have a portfolio that will comprise 50 stocks of Nifty in the same proportions.

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Nifty 50 is a benchmark Indian Stock Market index representing the weighted average of the 50 largest Indian companies that are listed with the National Stock Exchange. Nifty happens to be one of the main stock indices in India other one is BSE Sensex.

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The simplest way to identify Nifty trends is to use a simple moving average. Here we can identify whether it is a bull market or bear market using the simple moving averages. The next is Moving Average Convergence Divergence or the MACD Indicator which is useful in identifying the Nifty trend. The NSE index can also be identified by a simple calculator which is easier to determine the Nifty share chart price.

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Nifty 50 is calculated using the float-adjusted, market capitalization method. The index level demonstrates the aggregate market value of the stocks present during the duration.

It can be calculated using the index value:

Market Capitalization = Price x Equity Capital

Free Float Market Capitalization = Price x Equity Capital x Investable weight Factor.

Index value = Current Market Value/ (1000 x Base Market Capital)

The nifty share price chart is a benchmark for the measurement against all the equity shares in India.

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