There are many indicators which are present in the Technical
analysis. Some of the common indicators are moving averages, RSI, Bollinger
Bands and MACD. Moving averages are the simplest of all the indicators
available. Also the moving averages are of two types. One is Simple Moving averages and the other is
Exponential moving averages. The
moving averages are calculated for a particular period. The average of the most
recent price levels is taken. In the exponential moving average the exponential
scalar factor is taken along with the price levels. The exponential moving
average gives a faster response than the simple moving average. The tactics or
the strategy used with the moving average is to draw the moving average of two
different periods. One will be a moving average with low period and the other
will be a moving average with high period. Various signals are generated when
the crossover of two moving averages takes place. Out of the two types of
crossover one will represent a buy signal or the start of the uptrend and the
other will represent a sell signal or the start of the downtrend.
Besides the moving average the RSI is also an important
indicator and is used extensively by the technical analysts. RSI stands for
Relative strength index and it takes a value between 0 and 100. The values
below 30 are considered to be a oversold case and the value above 70 is
considered to be a overbought case. There are potential trend reversal chances
at the overbought and oversold levels.
The above discussed indicators are extensively used by the
Technical analysts in the advisory firms to generate accurate stock market tips
in the form of buy and sell calls with proper stop loss. Makes India Clean is
one such reputed advisory firm.
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