Technical Analysis Indicator Information
Here are descriptions of various types of technical indicators and links to more information.
| Indicator Name | Description | Links |
|---|---|---|
| Bollinger Bands | Bollinger Bands compare recent volatility with current prices. They define a band that is above and below the trailing moving average by a number of standard deviations. It is deemed significant when a stock reaches or passes it's band point, signaling a large price change. Typical adjustments to this indicator are the number of days to use for the trailing moving average and the "multiple" of the standard deviation from the average to use for the band. |
Wikipedia Investopedia |
| Bollinger Band Width | Bollinger Band Width looks at how far the upper and lower bands are apart. The width will increase when prices are highly volatile. A large width can indicate a current trend may be ending and a small width can signal a new trend is forming. |
Wikipedia Investopedia |
| Relative Strength Index | RSI is a price momentum oscillator. It compares the magnitude of a stock's recent gains and losses to produce a number between 0 to 100. Traditionally, RSI values of 30 or below has been considered an oversold signal, while 70 or more has indicated overbought. These values can be adjusted given market conditions since if the entire market is trending up or down many stocks could break that range. | Wikipedia |
| Commodity Channel Index (CCI) | CCI is based on the assumption that stocks are normally cyclical. It is an oscillator that compares the difference in price vs. the moving average and factors in the deviation. CCI can help identify overbought or oversold conditions. | Wikipedia |
| MACD | Moving Average Convergence/Divergence. MACD uses moving averages as a momentum oscilator and a lagging indicator. Strong signals are generated by MACD when the long and short term average trend lines move farther apart. MACD can be used as another method of determining if a stock is oversold or overbought. | Wikipedia |
| Williams %R | %R is a momentum oscilator comparing the latest price to the high and low over a series of preceding days. It is useful for identifying oversold/overbought levels. | Wikipedia |
| Balance Of Power | BOP measures the strength of buyers vs. sellers to determine if oversold or overbought. | |
| Moving Averages | Moving averages are used as indicators to determine if a stock is trading at a signficant distance from it's normal range. For example, a stock trading 25% below it's 50-day moving average is potentially oversold. | Wikipedia |
| Price Movement vs. an Index | These types of indicators are useful for ignoring any market-wide phenomenon. For example, let's say someone typically looks for the stock with the largest drop in price. This by itself is prone to error because if the entire market is moving down, the results don't necessarily give you any useful information. In this specific case, a good use might be to find the stock with the largest drop vs. it's industry index. | |
| StochRSI | An implementation of the stochastics formulas using RSI as the base. This is an oscilator that measures the value of a stocks RSI relative to its own range. The purpose is to notice real overbought or oversold trends faster, as sometimes RSI levels can stay at its extremes for extended periods. | Wikipedia |
| Fundamental Value Filters | Filters aren't really an indicator in themselves but more useful to exclude stocks while processing another indicator. Examples would be filtering by price, volume, EPS, market cap, etc. | |
| Volatility | The Volatility indicator scores stocks based on their relative volatility, compared to their average price, over a period of time. Higher volatility will have a larger score. Relative volatility means measuring the standard deviation as a percentage of the average price, which is more useful for comparison purposes than absolute volatility. |