Technical Indicators – Stage 9

Technical Indicators are algorithmic signals of the price movements based on price and volume movements. These are the supporting tools and no decision should be made based only on technical indicators. Moving average is a trend indicator giving the mean in a smooth way by taking thee average for 21 days. If the current price is above the moving average it is an indication of positive trend (Bullish) and negative (Bearish) if it is below the moving average. RSI is a non trending indicator. it has 70 and 30 mark. when it crossess over 70 it is an indication of over bought and when it goes below 30 it is an indication of over sold. we can buy the stock when it recovers and crossess over 30 and sell the stock when it crossess below the 70. Fibonacci is a series of numbers in which the number is a sum of previous two numbers and the ratio of any two consequtive numbers would be 1.618 or close to it. Fibonacci retracement is used to identify support and resistance using Fibonacci ratios of 38.2, 50 (the median point) or 61.8. these are arrived by dividing any number with the number next to it in the sequence and the second number next to it. if we mark the previous bottom and top as 0 – 100 the resistance is likely to happen at this points resulting in retracement.