Technical Indicators

Anyone who stops learning is old, whether at twenty or eighty. Anyone who keeps learning stays young.

Henry Ford

By Michael

Technical Indicators & Studies and studies are used to assist traders and investors in their skill. They are used to tell story or narrative to deter our emotions away from price and paint a clearer picture on price action. Below are some of the most important technical indicators as well as those used in the Stockonomy Currents Trading System.

Moving Averages

Moving Averages are smooth lines which overlay a stock chart. They are a lagging indicator which tells us where price has been in the past. For example, the current 20 day moving average price will be the average closing price of the past 20 days.

The two most common types of moving averages are the Simple Moving Average (SMA) and the Exponential Moving Average (EMA).

The SMA is (simply) the average closing price of the last X number of days. The EMA is similar except it attempts to reduce the lag by weighting the most recent days more.

In the AAPL Chart below, there is a 20-Day SMA (blue) and a 200-Day SMA (red). Notice how the 20 SMA follows price action much closer than the 200-SMA. That is because the 20-SMA takes the average price from the past 20 days versus the past 200 days.

“Moving averages are smooth lines which overlay a stock chart. They are a lagging indicator which tells us where price has been in the past.”

In the AAPL chart below, we have added a 5-Day SMA. Notice how it follows price action even closer than the 20-Day SMA.

Traders and investors use moving averages in many different ways. There are breakout traders who get a buy or sell signal when price crosses above or below their desired moving average. Traders may also use moving averages to determine the trend or support & resistance levels.

Relative Strength Index

The relative strength index (RSI) is a momentum indicator used in technical analysis that measures the magnitude of recent price changes, essentially whether price has moved up or down too quick. The RSI is displayed as an oscillator with readings between 0 and 100.

  • RSI < 30 = Oversold
  • RSI > 70 = Overbought

Below is the chart of OSUR. Notice how price reacts when RSI indicates overbought and oversold.

Have you ever bought a stock because everyone was making money on it… Only to see it fall as soon as you purchase it? My bet is that you heard about it because it was hot and the RSI was above 70 meaning it needed to cool off.

Be aware, just because RSI signals oversold or overbought doesn’t mean the trend will stop.  Take a look at the S&P 500 Index during the Covid-19 crash below. The RSI was indicating oversold before the market dropped an additional 31%.

Moving Average Convergence Divergence (MACD)

Moving average convergence divergence (MACD) is a trend-following momentum indicator that shows the relationship between two moving averages of a security’s price. The MACD is calculated by subtracting the 26-period exponential moving average (EMA) from the 12-period EMA.

The MACD is difficult to understand in theory, but simple in practice.

Below is a BYND chart with a short term EMA (12-Day) and medium term EMA (26-Day). Notice what happens when the 12-EMA crosses below the 26-EMA price turns bearish. Contrarily, when the 12-EMA crosses above the 26-EMA, price turns bullish.

Just before the bullish crossover in mid-April, notice how the EMAs are growing closer together as if they will intersect. Following the crossover, as the EMAs get further apart price rises faster.

The convergence and divergence of moving averages can be used as a momentum shift.

Note: In the most bullish of scenarios, the shorter term moving averages are greater than the longer term moving averages. That means if a chart is showing the 10-SMA, 20-SMA, and 30-SMA, then the 10 SMA > 20 SMA > 30 SMA.

There are loads of other technical indicators and studies out there to use, but these are 3 of the most popular.


Clinical Trading Mastery

Price Action

Support & Resistance

Using EMAs to Determine Trend

Technical Analysis:  Human Psychology

Identifying Trading Setups

The Holy Grail Trade

Building Your Watchlists

Planning Your Trades

Managing Your Trades Intraday

Determining Your Bias

Bonus: Options Trading 101

Bonus: Beginner to Expert 0-100 Trading Flow Map

Bonus: Portfolio Management, The Secret to Long-Term Greatness

Bonus: Mindset & Building Conviction

Market Watch

News & Headlines

Economic Calendar

04.04.2022; NFLX

04.01.2022; TTD

03.11.2022; NFLX

03.11.2022; TSLA

Trades by Ticker

Weekly Charts

Daily Charts

15-Minute Charts

5-Minute Charts

Uptrend Breakouts

Downtrend Breakouts

Earnings Beat

Gap & Go

Gap & Fill

Island Reversals

Bearish EMA Crossover

Double Bottom

Double Top

All-Time High Breakouts

Exhaustion Extension


Friday Lottos

EMA Pullback

Blow-Off Top

Head and Shoulders

Inverse Head and Shoulders

Bull Flag

Falling Wedge

AMD – 2021

SE – 2021


NVDA -2021

UPST -2021

PTON – 2021

NFLX – 2021

Sign Up With a Broker and Deposit Money

Download Thinkorswim

Understanding Price Action

Reading and Annotating Charts

Core Watch List

Day Trading

Swing Trading

Position Trading


Buy the Dip

Swing Trading


Position Sizing


Price Targets

Stop Loss


Option Contracts

Exit Plan

Support & Resistance

Candlesticks, OHLC Bars

Chart Setup



Moving Averages


Chart Patterns


Major Indices

Sector Indices

Breadth Analysis

Volatility Index



Strike Price

Expiration Date



Analyze Core Tickers

Analyze Daily Focus List

Using Price Alerts

Develop a Trading Plan

Stockonomy Jargon

New Highs vs New Lows

Stocks Above 200-Day SMA

Linear vs Logarithmic Charts

Fibonacci Retracements & Extensions

Market Research & Resources

CTM Custom Indicators

Early Entries & Key Pivots

Thinkorswim Experience

65-Min & 195-Min Charts

Earnings Do’s & Don’t’s

Unfiltered Notes From Live Trading 

Sector Indices

Option Flow

Candles & OHLC Bars

Trading Patterns for Dummies


Trading Patterns

Moving Averages


Relative Strength Index (RSI)

Stochastic RSI


CTM Chart Setup

Scanning Charts

Building Conviction

Mindset Conversion

Abundance Mentality – Always another plays

Notes from Live Trading

High Growth for High Returns

List of Stocks to Trade by Sector

Understanding Price Action

Ask a Question Your Question Here…

When is the Best Time to Buy a Stock

How to Find Stocks to Trade?

What Timeframe Should I Use?

How to Trade With a 9-5?

Advice for Beginner Who Wants to Learn Options Without Wasting Time

How to Trade a 5k Account Versus a 100k Account

What Strategy Would You Recommend for People Just Starting to Trade?

How Do You Identify a Bottom?

Can I Trust 1-Min Candle Volume?

Why Do We Use Specific EMAs?

What is a Chop Versus a Trend Day?

What Are Some Tools to Identify if the Current Day is Chop or Trend Day?

What if the Stock Market Crashes?

How to Read Options Flow for Beginners?

Should I Trade Penny Stocks with a Small Account

Coming Soon…

If you’d like to apply for a guest post or provide a recommendation, please contact our team at

Office Hours