Technical Indicator give basic calculations based on past data( on indications of price and/or volume). The values obtained are used to forecast stock price changes.
eg: Moving Average, RSI and support and resistance levels
Indicators filter price data with formulas and not direct reflections of the price action as compared to technical analysis.
So we can use the technical indicator as an additional tool along with other technical analysis to confirm the price movement.
The average closing price of a stock over a specified period called Moving Average.
moving average is a widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random price fluctuations. It is a trend-following, or lagging, indicator because it is based on past prices
RSI This is a momentum indicator that compares the average price change of the advancing periods with the average change of the declining periods.
Two horizontal lines indicating 70 at top and 30 at bottom
Price movement above 70 shows OVER BOUGHT area and price movement BELOW 30 shows OVER SOLD area
BUYING ZONE When price crosses ABOVE exactly at 30 it the right point to buy
The lines created by Fibonacci studies are believed to signal changes in trends as the prices draw near them
For reasons that are unclear, these ratios seem to play an important role in the stock market, just as they do in nature, and can be used to determine critical points that cause an asset’s price to reverse. The direction of the prior trend is likely to continue once the price of the asset has retraced to one of the ratios listed above.
