Technical Indicators

Technical indicators are mathematical calculations based on the price, volume, or open interest of a security or contract. … Examples of common technical indicators include Relative Strength Index, Money Flow Index, Stochastics, MACD. The moving average is a popular technical indicator which investors use to analyze price trends. It is simply a security’s average closing price over the last specified number of days. Some of the most popular moving averages are the 50-day moving average, the 100-day moving average, the 150-day moving average, and the 200-day moving average. Relative Strength Indicator is developed by J.Welles Wilder which compares the magnitude of recent gains and losses over a specified time period to measure speed and change of price movements of a security. Fibonacci retracements use horizontal lines to indicate areas of support or resistance. They are calculated by first locating the high and low of the chart. Then five lines are drawn: the first at 100% (the high on the chart), the second at 61.8%, the third at 50%, the fourth at 38.2% and the last one at 0% (the low on the chart). After a significant price movement up or down, the new support and resistance levels are often at or near these lines.