I feel like most people don’t give weekly charts their proper respect. Take a look at the daily and the weekly charts for the NDX. While many people will look for various moving averages or other technical indicators to show trend and direction of price, sometimes it just pays to simply zoom out to the weekly chart.

In the case of the NDX’s daily and weekly charts, it seems like the weekly chart smoothes out a lot of the daily noise, but it still captures the entire range for the week in its high and low marks. It also shows nicely that the trading ranges each week are fairly wide, and only in a few specific weeks did we really have strong movement significantly beyond the previous week’s trading range.

Why do weekly charts get overlooked so easily? One thing is the tools people use. StockCharts gives you a choice of daily or weekly bars, but BigCharts, Google Finance, and Yahoo Finance don’t give it as an option. Users of these free tools may not even know that weekly charts exist!

Another key reason for the lack of emphasis on weekly charts would be explained by a shorter attention span by most traders. Quite a few people are mezmorized by short-term price movements and may not even be satisfied with daily charts. To them, weekly charts would be a blunt instrument.

But for those with time frames longer than a day or a week, weekly charts can provide some added perspective and help dismiss some of the noise in a daily chart.
One gotcha when using tools like StockCharts… the indicators on the chart (RSI, MACD, and moving averages) are all calculated in the number of bars rather than a constant number of days. That means that the 50/200 day moving averages suddenly jump to the 50 week and 200 week moving averages — much slower and longer timeframes. The indicators are still valuable, but don’t forget this shift in timeframe when considering how you view the indicators.