[Cheatsheet]Technical Analysis In Stock Market

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Technical Analysis Cheatsheet

Chart Time Frame for Trading

Scalping5 minute chart
Intraday15 minute chart
Position1 hr chart(3-7 days)

1 day chart(week-month)



candle sticks




Hanging Man Pattern

hanging man pattern

In this pattern, we have wick at the bottom with the size as twice as its body. It may have small wick at top.

If we find this candle in uptrend, then its called hanging man candle. If we find the same candle in downtrend, its called hammer candle.

Hammer Pattern

hammer candle

The color of the candle is not much important. But If we get this candle in downtrend and in green color, then it may lead to trend reversal. Similarly if we get this candle in uptrend and in red color, it may lead to trend reversal.

If the next candle’s close is above the close of the hammer candle like in above image, it gives us the confirmation about the pullback. Its a similar case with the hanging man pattern.

Shooting Star Pattern

shooting star

This is the reverse of hammer/hanging man pattern. It has body at bottom and the wick is at top with size as twice as its body.

If we found this candle in uptrend near resistance level, then they may be a trend reversal. The color of the candle is not significant. But if the next candle’s close is below its candle, then it gives us the confirmation.

If we have a green candle just before the shooting star candle, then there will be high chances of trend reversal like we have in an above image.


Doji Candlesticks

doji candle sticks

Doji candle has the same opening and close prices. This is a significant reversal candle if we found it near support and resistance levels.

Two important variations in Doji candle are

  1. Gravestone
  2. Dragonfly



Dragonfly doji is a candle in which open, high and close are same with a long lower wick. This is a bullish reversal candle and gives us a signal like hammer candle.

Gravestone doji is a candle in which open, close and low are same with long higher wick. This is similar to shooting star candle and signals about the trend reversal from an uptrend to downtrend.


Marubozu Candle


This is a momentum candle. it has a long body but no or very small wicks. The green color Marubozu shows strong bullish nature. The red color Marubozu shows strong bearish nature.


Technical Indicators

  1. Leading Indicators
  2. Lagging Indicators

Leading Indicators

Leading indicators are generally leads the prices which means prices follow the moment of such indicators. The main benefits of this indicators is to get signal of early entry and exit.


This is observed between price and indicator. With the help of divergence, we will get an early signal to exit the trade.


There are two types of divergence.

1. Positive Divergence(bullish)

2. Negative Divergence(bearish)

If the price going down making lower lows but the indicator is in opposite direction, then its a positive divergence. Similarly if the price is moving upwards and the indicator going downwards, its negative divergence which means it may lead to trend reversal. Refer above image.

Best indicator to combine with price in this case would be RSI.


Bollinger Band

This can be used for all types of trading. This is a volatility indicator. The purpose of this indicator is to provide the relative definition of high and low.

bollinger band

It has 3 bands.

The center one is the 20D SMA and on both sides, are the lines of standard deviation. These two lines provide relative boundaries of highs and lows.

Uses of Bollinger Band
  1. Indicate Volatility
  2. Tell us about breakouts
  3. Continuation of trend
  4. Achieve trend reversal signal

bollinger bands

Indicate Volatility

They indicate high and low volatility. Expansion and contraction of the band indicates the volatility of the particular stock. When bands are expanded, it means there will be a huge volatility. We will notice a sharp up move or a sharp down move in prices.

When bands are closer to each other, it means there’s a less volatility. When ever the price is moving sideways and the bands are also in same movement, we should prefer not trading.

Tell us about breakouts

When bands contract too much, then there’s a possibility of breakout(Refer above image).



Lagging Indicators

Lagging indicators are also known as trend following indicators. These are more suitable in trading market but not effective is sideways market. The main benefit with this indicator is ability to catch a move and remain in a move. The drawback of lagging indicators is they signals late.

1.Moving Averages

Use this indicator only when the stock is trending. Use exponential moving average.

Time frames for moving averages

  • Intraday – 3/7/14 days or 5/10/20 days
  • Positional – 14/21/50 days
  • Long term – 50/100/200 days


Fast MA crosses above a slow MABuy Signal

Fast MA crosses below a slow MASell Signal

Use moving averages only in trends(uptrend/downtrend).


It helps us to know the trend and momentum.

MACD is above 0th line – Uptrend / Bullish

MACD is below 0th line – Downtrend / Bearish

If both lines convergeBuy Signal

If both lines divergeSell signal



RSI (Relative Strength Index)

RSI< 30  – Over Sold

RSI > 70 – Over Bought

50<RSI<70 – Buy Signal



–I will add more concepts later.

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