Roof of the Stock Building

Technical Indicator is a result of mathematical calculations based on indications of price and/or volume. The values obtained are used to forecast probable price changes. Indicators filter price action with formulas and not direct reflections of the price action as compared to technical analysis. Therefor we can use the technical indicator as an additional tool along with other technical analysis to confirm the price movement. Moving average is a trend in technical analysis, it helps to identify the average of the market. For a particular time period we identify the closing price of the stock and divide it by the total days we get the average value. If the price goes above the stock value it is time to buy the stock. If the price goes below the stock price it is time to sell the stock. It does not based on volume, it helps to find the moving price and the investment on the stock. So we can use this along with technical analysis to find the trend. Relative strength index indicator is based on the number of positive and negative candlestick bars and this works well with non trending zone. When the RSI is applied on the non trending zone, it provides the index with the mark of 70 and 30 scale. When the index moves below 30, it indicates the aggressive selling pressure and when it crosses 30 again and moves above, it indicates the bullish trend and the long position can be created to buy.