Key Indicators for Tracking Trends in Stock Market Values - II

Bollinger Bands:

Consists of a middle band (SMA) and two outer bands set at a specified number of standard deviations (usually 2) above and below the middle band. Bollinger Bands expand and contract based on market volatility, providing insight into potential overbought or oversold conditions.

Volume:

Measures the number of shares traded during a specific period. Volume analysis helps confirm price movements; significant price changes accompanied by high volume are more likely to indicate a true trend.

Support and Resistance Levels:

Horizontal lines that indicate where the price has historically had difficulty moving above (resistance) or below (support). These levels help in identifying potential entry and exit points and understanding the supply and demand dynamics.

Fibonacci Retracement Levels:

Derived from the Fibonacci sequence, these levels (23.6%, 38.2%, 50%, 61.8%, and 100%) are used to identify potential reversal levels during retracements of an asset’s price.

Stochastic Oscillator:

Compares a stock's closing price to its price range over a specific period, typically 14 days. It consists of two lines: %K and %D. Values above 80 indicate overbought conditions, while values below 20 indicate oversold conditions.

Average Directional Index (ADX):

Measures the strength of a trend on a scale from 0 to 100. ADX above 25 typically indicates a strong trend, while below 20 suggests a weak trend. It does not indicate the trend direction but helps in assessing the trend's intensity.