Price is the most significant indicator of any trend. It can determine the course without any assistance from volume or other technical indicators. Price can be analysed using several instruments.
Moving averages help in understanding the price trend; Bollinger Band defines the standard anticipated price deviation; Fibonacci Retracements helps in recognizing support and resistance levels; Candlestick patterns can help you preempt a bullish and bearish bias.
Volume plays a key role in visualising the interest of market participants. One can determine significance of a swing trade on the basis of the volume.
A robust surge in volume on a breakout clearly implies the possibility of a strong upside. Further, follow-up buying implies higher conviction thus increasing the possibility of achieving target and preventing losses.
And the last one is momentum oscillators. A rising stock may not necessarily always mean a firm upside. Hence, to gauge the outlook more precisely one needs to asses these select momentum oscillators.
The RSI helps in understanding the strength with overbought and oversold conditions as the extreme. Similarly, the MACD helps in identifying the direction, momentum and likely duration of the trend.
The simplest way to interpret a stock is to plot all these three indicators with standard parameters. The combination of these should provide a concise outlook on the stock. One may not be able to take a firm call, but should be able to identify the current movement.
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