Price charts show a stock’s price plotted over a time frame. The technical indicators explained below are used to analyze historical data, price movements’ patterns and statistical trends from the trading activity.
The Moving Average (MA) is a price based, lagging indicator. It is calculated by taking the average price of a security for a specific period of time. The MA smooths out price trends and is used to identify trend direction, gauge momentum and define support and resistance levels.
A Bollinger Band consists of three lines which are plotted in relation to a security’s price: a middle band which is a simple moving average of a security’s price and an upper and lower bands which are typically 2 standard deviations from the middle band. It is used to generate oversold or overbought signals.
The Moving Average Convergence/Divergence (MACD) indicator is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA. A nine-day EMA of the MACD called the "signal line," is then plotted on top of the MACD line. The MACD is used to identify a security’s trend direction and momentum.
The Momentum indicator measures the rate of change of a security, and the acceleration of a security’s price or volume. It determines market trends by comparing the current price with the previous price from a number of periods ago.