Key Indicators for Tracking Trends in Stock Market Values - I
Moving Averages:
Simple Moving Average (SMA): Calculates the average price over a specific period, smoothing out price data to identify trends. Common periods are 50 and 200 days.
Exponential Moving Average (EMA):
Similar to SMA, but gives more weight to recent data, providing quicker responses to price changes. It is useful for identifying short-term trends.
Relative Strength Index (RSI):
A momentum oscillator that measures the speed and change of price movements on a scale of 0-100. Readings above 70 indicate overbought conditions, while readings below 30 indicate oversold conditions. It helps in identifying potential reversal points.
Moving Average Convergence Divergence (MACD):
Analyzes the relationship between two EMAs (typically 12-day and 26-day). The MACD line crossing above the signal line (9-day EMA) suggests a buy signal, and crossing below suggests a sell signal. It is useful for identifying changes in the strength, direction, momentum, and duration of a trend.