Different people follow
different approaches towards the Stock
market to earn good profits. Some traders use the Technical analysis and
others use news as the basis of the trading. The use of the Technical analysis
is by far the most favorite and most common way of investing in the Stock
market. In the Technical analysis the charts of the price movements are
analyzed and the historic data is used to predict the future price movements.
The price and volume are the two of the most important entities studied in the
Stick market.
There are more than a
dozen of indicators used in the technical analysis. The indicators are broadly
categorized as momentum indicators and oscillator indicators. The momentum
indicators are the trend following indicators and the oscillators are used to
show the strength of the trends. RSI and Bollinger bands are both the
oscillator indicators. The RSI stands for the Relative Strength index and helps
to determine the overbought and oversold levels. The RSI index takes a value
between 0 and 100. The values below 30 are considered as oversold levels and
the value above 70 is considered as overbought levels. The overbought and
oversold levels are the potential chances of trend reversals. The Bollinger
bands are formed using moving average and the standard deviations across the
moving average. The price moves confined in the Bollinger bands. Thus the
breakouts from the upper and lower bands can be taken as the potential chances
of trend reversal.
The RSI and Bollinger
bans can be used together to confirm the buy and sell signals. The advisory
firms like Money Classic Research use
the strategies like stated above to provide stock market tips to their clients.
They provide accurate tips in the form of equity tips and intraday trading tips to the traders to trade effectively in the
Stock market.
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