RSI (Relative Strength Index)

The relative strength index (RSI) one of the most frequently used and well known momentum indicators. As a momentum indicator it compares the magnitude of recent gains to recent losses in an attempt to determine overbought and oversold conditions of an asset. The range of RSI is from 0 to 100. An asset is deemed to be overbought once the RSI approaches the 70 level, meaning that it may be a good candidate for a pullback or fall. An asset is deemed to be oversold once the RSI approaches the 30 level, meaning that it may be a good candidate for a bounce or rally. 
 

Stochastic Oscillator

The location of the current close relative to the high/low range over a set number of periods is called the Stochastic Oscillator. Closing levels that are consistently near the top of the range indicate accumulation (buying pressure) and those near the bottom of the range indicate distribution (selling pressure). Readings below 20 are considered oversold and readings above 80 are considered overbought. However a reading above 80 doesn’t necessarily constitute a bearish signal or reading below 20 constitute a bullish signal. A security can continue to rise after the Stochastic Oscillator has reached 80 and continue to fall after the Stochastic Oscillator has reached 20.

A sell signal is confirmed when the Stochastic Oscillator to moves down below and through 80. A buy signal is confirmed when the Stochastic Oscillator moves up and through 20.
 

Williams’s %R

Williams’s %R is a simple but effective momentum oscillator. It is important to remember that overbought does not necessarily imply time to sell, and oversold does not necessarily imply time to buy. A security can be in a downtrend, become oversold and remain oversold as the price continues to trend lower. Once a security becomes overbought or oversold, traders should wait for a signal that a price reversal has occurred. One method of using Williams’s %R might be to identify the underlying trend and then look for trading opportunities in the direction of the trend. In an uptrend, traders may look to oversold readings to establish long positions. In a downtrend, traders may look to overbought readings to establish short positions.
 

Moving Average Convergence/Divergence (MACD)

The MACD indicator is a refinement of the two moving averages system and measures the distance between the two moving average lines. The MACD indicator is primarily used to trade trends and should not be used in a ranging market. Signals are generated when MACD crosses its signal line (a 9 day exponential moving average of MACD). Go long when MACD crosses its signal line from below. Go short when MACD crosses its signal line from above.