Technical Indicators

Indicators are tools with the predefined analysis and set of algorithms, this can be applied on the trend to get the indication of price movement. It can be used as supporting tool to confirm the analysis derived from the technical analysis. But the indicators does not work in all scenarios, some of them work for trending and some of them indicate well in non trending zone.
Moving average – can be applied for analysis with trending zone. This indicator basically smoothen the trend with the average price value previous 21 days
RSI – works well with non trending zone.
The RSI can also be used to identify the overbought/oversold levels in a counter, the RSI value above 70 as ‘overbought zone’ and below 30 as ‘oversold zone’.
If a stock is trading stable and moves below 30 level on RSI indicator and then moves above 30 level with significant volume we can create a long position and similarly we can create a short position when the stock that was traded above 70 level breaks down the 70 level with high volume.