Strength indicators

if price extremes occur with weak momentum, it signals an end of movement in that direction. If momentum is trending strongly and prices are flat, it signals a potential change in price direction. (Example: Stochastic, MACD, RSI).

• Strength indicators

Market strength describes the intensity of market opinion with reference to a price by examining the market positions taken by various market participants. Volume or open interest, are the basic ingredients of this indicator. Their signals are coincident or leading the market. (Example: Trading Volume).

• Support/Resistance indicators

Support and resistance describe price levels where markets repeatedly rise or fall, and then reverse. This method shows the price levels at which the market is expected to reverse and stay within the S/R levels (e.g. – not exceeding the support or the resistance level). This phenomenon is attributed to basic supply and demand forces. (Example: Trend Lines)

• Trend indicators

Trend is a term used to describe the persistence of price movement in one direction over time. Trends move in three directions: up, down and sideways. Trend indicators smooth variable price data to create a composite of market direction. Generally, the trend could be either UP, or DOWN, or TREAD (flat). (Example: Moving Averages, Trend lines).

• Volatility indicators

Describe the intensity of fluctuations in the market prices. A change in the volatility level hints at a coming change in the price. Volatility is a general term used to describe the magnitude, or size, of day-to-day price fluctuations independent of their direction. Generally, changes in volatility tend to lead changes in prices. (Example: Bollinger Bands).

Unlike the fundamental analyst, the technical analyst is not much concerned with any of the “bigger picture” factors affecting the market, but concentrates on the activity of that instrument's market.