What are the stock technical indicators? A tutorial on the 4 most commonly used indicators.

What is a stock technical indicator?

When investors buy and sell stocks, they typically look at both fundamentals and technicals. Fundamentals? It's about whether the company is making money and whether the price-to-earnings ratio is high or low. The technicals are divided into two parts: technical analysis and technical indicators. The former uses candlestick charts and price trends, while the latter consists of lines derived from mathematical formulas to help you gauge market momentum.

The market is currently quite volatile. Technical analysis seems to be more important. Research from 2025 shows that high-frequency trading is prevalent, and everyone is increasingly relying on these indicators. Being able to understand the lines may allow one to get ahead.

What are the stock technical indicators?

Technical indicators are generally divided into three main categories:

trend indicators

These indicators help you understand future trends. Bullish? Bearish? It gives you the answer.

Common technical indicator 1: Bollinger Bands

Three green lines move along with the K-line. By observing its fluctuation range, one can roughly guess the future market. The S&P 500 index is currently running between the upper and middle bands, and the bullish pattern seems to still be in place.

Common technical indicator 2: Moving Average

A technical indicator used by many people. Price above the line? Bullish. Price below the line? Bearish. It's that simple. The long-term moving average is still trending upwards, and the bull market doesn't seem to be over yet. Who knows?

oscillating technical indicator

These indicators help you identify highs and lows. Where are the turning points? It comes to tell you.

Common technical indicator 3: Relative Strength Index ( RSI )

A blue line, range from 0 to 100. A favorite among beginners, simple and easy to understand.

Common technical indicator 4: MACD indicator

Also suitable for beginners. Look at momentum, look at trends, find turning points. A multi-functional indicator.

Common technical indicator 5: KD indicator

K and D values are composed. Stocks, futures, and foreign exchange can all use it.

Common Technical Indicator 6: Williams Indicator

It is somewhat similar to KD, but it is used less frequently. It fluctuates between 0 and 100. Overbought? Oversold? It's clear at a glance.

Common technical indicator 7: CCI indicator

There is no fixed range. It mainly depends on divergence phenomena. Is the trend about to end? It will give you hints.

Common Technical Indicator 8: ATR Indicator

A good helper for setting stop-loss points. Indicator going up? Increased volatility. Going down? Decreased volatility. Simple.

trading volume technical indicator

Who is buying? Who is selling? Is the market hot? These types of indicators tell you.

Common technical indicator 9: Volumes indicator

Look at the trading volume. Tech stocks and healthcare stocks seem very active. People still like these sectors.

The Four Most Commonly Used Technical Indicator Analysis Tutorials

moving average

Calculates the average price over a period of time. Different days create different line sensations. Short-term moving averages fluctuate greatly, while long-term moving averages are stable.

How to calculate? N-day moving average = Sum of N-day closing prices ÷ N

Short-term traders love short-term moving averages. Long-term investors look at long-term moving averages. Each takes what they need.

relative strength index ( RSI )

Blue curve, range from 0 to 100. Whether bullish or bearish depends on it.

RSI > 70? Overbought area, be careful of a drop. RSI<30? Oversold area, may bounce.

You can also observe the crossovers of the RSI across different periods. A golden cross indicates buying, while a death cross indicates selling. It's quite interesting.

MACD technical indicator

The difference between two exponential moving averages of different periods (EMA). Includes DIF value and MACD value.

The calculation is a bit complicated. The key is to look at the crossovers and the color changes in the histogram.

Does the fast line cross the slow line downward? Death cross, sell signal. The fast line crosses above the slow line? Golden cross, buy signal.

The change of the bar chart from red to green also has its mysteries. Market sentiment is all contained within.

Random Indicator ( KD )

The K value and D value are two lines. K reacts quickly, while D reacts slowly.

KD>80? Overbought, the selling point has arrived. KD<20? Oversold, can pick up cheap.

You can also observe the crossover. Did the K-line cross above the D-line? A long opportunity. Did the K-line cross below the D-line? A short opportunity. However, the KD can sometimes be misleading, so be cautious when using it.

Summary of Stock Technical Indicators

It's 2025, and technical indicators are becoming more powerful. With the support of AI and big data, these lines are becoming more meaningful. Using a variety of indicators together, combined with the fundamentals, the accuracy of decision-making is likely to be higher.

Different indicators are suitable for different people. Finding the right combination and establishing your own system is the most important. Technology and healthcare are still quite strong, and it's worth taking a closer look.

Even if the lines are precise, they are only supplementary. The market is always full of uncertainty. Caution is key.