Assumptions of technical Analysis

1. The market discounts everything: Technical analysts believe that everything

from a company's fundamentals to broad market factors to market
psychology is already priced into the stock. This point of view is congruent
with the Efficient Markets Hypothesis (EMH) which assumes a similar
conclusion about prices. The only thing remaining is the analysis of price
movements, which technical analysts view as the product of supply and
demand for a particular stock in the market.
2. Price moves in trends: Technical analysts expect that prices, even in random
market movements, will exhibit trends regardless of the time frame being
observed. In other words, a stock price is more likely to continue a past trend
than move erratically. Most technical trading strategies are based on this
assumption.
3. History tends to repeat itself: Technical analysts believe that history tends to
repeat itself. The repetitive nature of price movements is often attributed to
market psychology, which tends to be very predictable based on emotions
like fear or excitement. Technical analysis uses chart patterns to analyze
these emotions and subsequent market movements to understand trends.
While many forms of technical analysis have been used for more than 100
years, they are still believed to be relevant because they illustrate patterns in
price movements that often repeat themselves.
 Tabs-Indicators Excel
Candle Bars:

1. Open – the first trade during the period specified by the candle
2. High – the highest traded price
3. Low – the lowest traded price
4. Close – the last trade during the period specified by the candle

Signal
Buy: When the bars are mostly green
Sell: When most candle bars are mostly red
(We prefer not to use it)
Bollinger Bands:

Bollinger Bands are envelopes plotted at a standard deviation level above and below
a simple moving average of the price. Because the distance of the bands is based on
standard deviation, they adjust to volatility swings in the underlying price.

Signals:
Buy: When the price is outside the lower band.
Sell: When the price is over the upper band.
Relative Strength Index (RSI):
The relative strength index (RSI) is a technical indicator that measures the
momentum of a security based on its closing prices. Once calculated, the RSI is
displayed as an oscillator, which is a line graph between two extreme values. In the
case of RSI, those extremes are 0 and 100.

Signal:
Buy: When the RSI line is below the 30.
Sell: When the RSI line is above the 70.
MACD (Moving Average Cross Divergence):
Moving average convergence/divergence (MACD, or MAC-D) is a trend-
following momentum indicator that shows the relationship between
two exponential moving averages (EMAs) of a security’s price. The MACD line is
calculated by subtracting the 26-period EMA from the 12-period EMA.

The result of that calculation is the MACD line. A nine-day EMA of the MACD line is
called the signal line, which is then plotted on top of the MACD line, which can
function as a trigger for buy or sell signals. Traders may buy the security when the
MACD line crosses above the signal line and sell—or short—the security when the
MACD line crosses below the signal line. MACD indicators can be interpreted in
several ways, but the more common methods are crossovers.

Signals:
Buy: When MACD line crosses the signal line
When the MACD line is over the signal line and crosses the horizontal 0 line.

Sell: When the signal line crosses the MACD line

When the MACD line is under the signal line and crosses the horizontal 0 line.
SupRes Levels (Support and Resistance Levels)
‘Support’ and ‘resistance’ are terms for two respective levels on a price chart that
appear to limit the market’s range of movement. The support level is where the
price regularly stops falling and bounces back up, while the resistance level is where
the price normally stops rising and dips back down. The levels exist as a product of
supply and demand – if there are more buyers than sellers, the price could rise, and
if there are more sellers than buyers, the price tends to fall.
Aroon Indicator

The Aroon indicator is a technical indicator that is used to identify trend changes in

the price of an asset, as well as the strength of that trend. In essence, the indicator
measures the time between highs and the time between lows over a time period.
The idea is that strong uptrends will regularly see new highs, and strong
downtrends will regularly see new lows. The indicator signals when this is
happening, and when it isn't.

The indicator consists of the "Aroon up" line, which measures the strength of
the uptrend, and the "Aroon down" line, which measures the strength of
the downtrend.

Signals:

Buy: When the Aroon Up is crossing over the Aroon down- the Aroon Up remains
over the Aroon down

Sell: When the Aroon Up is crossing down the Aroon Down- the Aroon Up remains
below the Aroon down
CCI(Commodity Channel Index)

The Commodity Channel Index (CCI) is a momentum-based oscillator used to help

determine when an investment vehicle is reaching a condition of being overbought
or oversold.

Signals:
Buy: When the CCI Line is over the 100
Sell: When the CCI Line is under the -100
DMI (Directional Movement Index)

The directional movement index (DMI) is an indicator which direction the price of
an asset is moving. The indicator does this by comparing prior highs and lows and
drawing two lines: a positive directional movement line (+DI) and a negative
directional movement line (-DI).

Signals:

Buy: When the +DI is above -DI

Sell: When the -DI is below +DI

Ulcer Indicator There are some logical errors in the calculation of the function in
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