📈Technicals · 16 terms

Technicals

Indicators are arithmetic on price and volume. Knowing which arithmetic tells you what each one can and cannot see.

There are only three kinds of indicator

Almost everything on this page falls into one of three groups, and knowing which group an indicator belongs to tells you more than knowing its formula.

Trend followers smooth price to show direction: moving averages, the golden cross and death cross that come from two of them crossing, MACD. They are late by construction — smoothing means waiting — and they are excellent in a market that is going somewhere and useless in one that is not.

Oscillators measure how stretched price is relative to its own recent behaviour: RSI, divergence between an oscillator and price, Bollinger Bands. These work in ranges and fail in trends. An RSI reading above 70 in a strong uptrend does not mean sell; it means the trend is strong, and traders who sold the first overbought print have watched it stay overbought for weeks.

Volatility and location measures describe the field of play rather than the direction: ATR, volume, volatility itself, VWAP, pivot points, Fibonacci retracement. These are the ones worth most to an intraday trader, because they answer "how far does this thing normally travel in a day" and "where is the level everyone is watching".

The intraday shortlist

For a session trader in Indian index or large-cap stocks, the list narrows fast. VWAP — the volume-weighted average price — is the single most-watched intraday line, because it is where the average rupee traded today got filled. Institutions benchmark execution against it, so it acts as a real reference rather than a drawn one. Price above VWAP and holding is a different day from price below it and failing at it.

ATR tells you what a normal day's range is for this instrument. It is the sanity check on both stops and targets: a stop placed inside a fraction of the average true range will be taken out by noise, and a target beyond one ATR needs an unusual day to reach.

Support and resistance are the vaguest terms here and the most used. They are worth something when they come from something real — a prior session's high, an opening range boundary, a strike carrying heavy open interest — and worth very little when they come from a line someone drew across two points on a chart.

What indicators cannot do

Every indicator on this page is a transformation of price and volume that have already happened. None of them contains information the market did not already have. That is not an argument against using them — a good summary of the past is genuinely useful — but it does set a ceiling on what to expect, and it explains why an indicator that looks perfect on a chart of last year rarely repeats the performance.

The failure mode to watch for is stacking. Five indicators that are all derived from the same closing prices will agree with each other most of the time, and their agreement feels like confirmation. It isn't; it is the same information counted five times.

All 16 terms in Technicals

Alphabetical, each with a worked example. Every one of these is searchable from the glossary index.

ATR (Average True Range)

The average size of a period's price range — a pure volatility measure. Widely used to size stop-losses (e.g. a stop 1.5× ATR away).

e.g. ATR = ₹12; place your stop ~1.5 × 12 = ₹18 away so normal noise doesn't knock you out.

Bollinger Bands

A moving average with bands set ±2 standard deviations away. Price tends to stay inside; a squeeze (narrow bands) often precedes a big move.

e.g. Bands pinch tight for a week (a 'squeeze'), then price bursts out of the upper band on a breakout.

Breakout

Price moving decisively out of a range or past a key level, often on rising volume. A breakdown is a breakout to the downside.

e.g. A stock stuck between ₹480–₹500 for weeks closes at ₹512 on heavy volume → a breakout above the range.

Divergence

When price and an indicator (e.g. RSI) move in opposite directions — e.g. price makes a new high but RSI doesn't. Warns the trend may be weakening.

e.g. Price prints a higher high but RSI makes a lower high (bearish divergence) → rally is losing steam.

Fibonacci Retracement

Horizontal levels (23.6%, 38.2%, 50%, 61.8%) that mark likely pullback zones within a trend, based on the Fibonacci ratios. 61.8% is the 'golden' retracement.

e.g. A stock runs ₹100 → ₹200; the 61.8% retracement at ₹138 is a common spot for the pullback to find support.

Golden Cross / Death Cross

A golden cross is when the 50-day MA crosses above the 200-day MA (bullish structure). A death cross is the opposite (bearish). Slow but widely watched.

e.g. INFY's 50-DMA rising through its 200-DMA prints a golden cross — a signal medium-term momentum has turned up.

MACD

Moving Average Convergence Divergence — the gap between a fast and slow EMA, plus a signal line and histogram. Crossovers flag momentum shifts.

e.g. The MACD line crossing above its signal line is a common bullish momentum trigger.

Moving Average (SMA/EMA)

The average closing price over N periods, plotted as a smooth line to reveal trend. EMA weights recent prices more. Price above the 200-DMA is broadly bullish.

e.g. 50-DMA = the average of the last 50 closes. Price above its 200-DMA is treated as a long-term uptrend.

Pivot Points

Support/resistance levels computed from the prior day's high, low and close. Popular with intraday traders as ready-made R1/R2/S1/S2 levels.

e.g. Pivot = (High + Low + Close) ÷ 3. Price above the pivot = bullish bias for the day; R1/S1 are the first targets.

Resistance

A price level where selling tends to appear and cap a rally — a 'ceiling'. Once broken, resistance often flips to support.

e.g. NIFTY stalls at 24500 twice; once it closes decisively above, 24500 tends to become the new support.

RSI (Relative Strength Index)

A 0–100 momentum oscillator. >70 = overbought (stretched), <30 = oversold (possible bounce). Divergence between RSI and price warns of trend exhaustion.

e.g. A stock rallies hard and RSI hits 82 → overbought; a pullback or pause becomes likely.

Support

A price level where buying tends to appear and halt a decline — a 'floor'. Often a prior low, round number, or high Put OI strike.

e.g. TATASTEEL bounces off ₹140 three times in a month → 140 is acting as support.

Trend

The prevailing direction of price. An uptrend makes higher highs and higher lows; a downtrend makes lower highs and lower lows. 'The trend is your friend.'

e.g. A stock going 100 → 120 → 110 → 135 → 125 is in an uptrend (each dip stops higher than the last).

Volatility

How much price fluctuates. Historical (realized) volatility looks backward; implied volatility (from options) looks forward. Higher volatility = wider swings and bigger risk.

e.g. BANKNIFTY swinging ±1.5% a day is far more volatile than a steady FMCG name moving ±0.4%.

Volume

The number of shares/contracts traded. Volume confirms moves — a breakout on high volume is more trustworthy than one on thin volume.

e.g. A breakout above resistance on 3× the average volume is far more reliable than one on quiet, thin trade.

VWAP

Volume-Weighted Average Price — the average price weighted by volume over the day. Institutions use it as a fair-value benchmark; price above VWAP is intraday-bullish.

e.g. A stock trading above its VWAP all session shows buyers in control; a dip to VWAP is a common intraday entry.

Where you'll see these on ScalperSense