Technical Indicators Explained

Technical indicators help traders understand price momentum, trend direction, and potential reversals. Here are the most widely used indicators and what they actually tell you.

RSI (Relative Strength Index)

RSI measures how fast and how far a price has moved recently. It ranges from 0 to 100.

Above 70 — the asset is considered overbought (price may pull back)

Below 30 — the asset is considered oversold (price may bounce)

Between 30-70 — neutral territory

RSI doesn't predict direction. It measures the speed of price changes. A stock at RSI 80 isn't guaranteed to drop — it just means the recent rally was sharp. Combine RSI with other indicators for better context.

MACD (Moving Average Convergence Divergence)

MACD tracks the relationship between two moving averages (typically 12-period and 26-period EMAs). It consists of:

MACD line — the difference between the two EMAs

Signal line — a 9-period EMA of the MACD line

Histogram — the gap between MACD and signal line

When the MACD line crosses above the signal line, it's a bullish signal. When it crosses below, it's bearish. The histogram shows how strong the current momentum is.

Bollinger Bands

Bollinger Bands place a channel around a moving average using standard deviations:

Middle band — 20-period simple moving average (SMA)

Upper band — SMA + 2 standard deviations

Lower band — SMA - 2 standard deviations

Price touching the upper band doesn't mean "sell" and touching the lower band doesn't mean "buy." Bollinger Bands show volatility. When bands narrow (a "squeeze"), a big move is coming. The direction depends on other factors.

Moving Averages (SMA & EMA)

Moving averages smooth out price data to show the trend:

SMA (Simple Moving Average) — equal weight to all periods

EMA (Exponential Moving Average) — more weight to recent prices

Common setups:

50-day and 200-day SMA crossover (the "Golden Cross" and "Death Cross")

9 EMA and 21 EMA for short-term trading signals

Price above the 200-day SMA generally indicates a long-term uptrend

Volume Analysis

Volume confirms price moves. A breakout on high volume is more reliable than one on low volume. Watch for:

Volume spikes on breakouts (confirms the move)

Declining volume during rallies (warns of weakening momentum)

Volume divergence (price makes new highs but volume doesn't)

How Stock And Crypto Tracker Uses These Indicators

Our AI analyzes these indicators automatically for every ticker on your watchlist. Instead of requiring you to read charts, we translate the signals into plain English:

"RSI is at 75 — short-term overbought after a 12% rally this week"

"MACD crossed bearish on the daily, but weekly trend is still up"

"Bollinger squeeze detected — expect increased volatility"

You get the insight without needing to learn charting software.

Next Steps

See our indicators page: https://stockandcryptotracker.com/en/indicators

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