My first choice is MACD -- which stands for
Moving Average Convergence/Divergence (MACD)
this method was developed by Gerald Appel
read more about how to use it here
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:moving_average_conve
Then this investopedia article also have some good references
http://www.investopedia.com/terms/m/macd.asp
Well according to investopedia (I hope it is not considered as copyscape -- )
1. Crossovers - As shown in the chart above, when the MACD falls below the signal line, it is a bearish signal, which indicates that it may be time to sell. Conversely, when the MACD rises above the signal line, the indicator gives a bullish signal, which suggests that the price of the asset is likely to experience upward momentum. Many traders wait for a confirmed cross above the signal line before entering into a position to avoid getting getting "faked out" or entering into a position too early, as shown by the first arrow.
2. Divergence - When the security price diverges from the MACD. It signals the end of the current trend.
3. Dramatic rise - When the MACD rises dramatically - that is, the shorter moving average pulls away from the longer-term moving average - it is a signal that the security is overbought and will soon return to normal levels.
Traders also watch for a move above or below the zero line because this signals the position of the short-term average relative to the long-term average. When the MACD is above zero, the short-term average is above the long-term average, which signals upward momentum. The opposite is true when the MACD is below zero. As you can see from the chart above, the zero line often acts as an area of support and resistance for the indicator.
So how will you decide whether a security is indicating a overbought or oversold. Well you can use following indicators for it.
Stochastic oscillator
FSTO Fast stochastic and slow stochastic oscillator
The stochastic momentum oscillator is used to compare where a security's price closed relative to its price range over a given period of time. There are three types of Stochastic Oscillators: Fast, Slow, and Full. The Full Stochastic is discussed later. For now, let's look at Fast versus Slow. As shown above, the Fast Stochastic Oscillator is made up of %K and %D. In order to avoid confusion between the two, I'll use %K (fast) and %D (fast) to refer to those used in the Fast Stochastic Oscillator, and %K (slow) and %D (slow) to refer to those used in the Slow Stochastic Oscillator.
It is calculated using the following formula:
| %K = 100[(C – L14)/(H14 – L14)] |
C = the most recent closing price
L14 = the low of the 14 previous trading sessions
H14 = the highest price traded during the same 14-day period.
http://www.investopedia.com/ask/answers/05/062405.asp
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:stochastic_oscillator
So where to get it for bse and nse charts
well if you are icicidirect customer they have some very good online charting software for it.But if you are like me which don't have any access to such software then you can move to three websites i would suggest you use them with your patience watch the market and don't try to just go against the market.
well i was watching voltas so please note it.
1) Google Fianance india - i think it is more frequently updated then yahoo so go for it
http://www.google.com/finance?q=NSE:VOLTAS
2)Yahoo Finance India
http://in.finance.yahoo.com/q/ta?s=VOLTAS.NS&t=1y&l=on&z=m&q=l&p=b,p,s,v,e10&a=m26-12-9&c=
3)Charts Bse
http://charting.bseindia.com/charting/index.asp
Though looks promising but it needs to be refreshed by hand
and i hate it.
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