MOMENTUM OSCILLATORS - A TOOL TO PREDICT STOCK PRICE BEHAVIOUR

Abstract

Stock markets are always taken as the barometer of the economy. The price movement of their indices reflects every ups and downs of the economy. Although seem to be random, these price movements do follow a certain track which can be identified using appropriate tool over long range data. One such method is of Technical Analysis wherein future price trends are forecasted using past data. Momentum Oscillators are the important tools of technical analysis. The current paper aims to identify the previous price movements of sensex by using Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) tools and also aims to check whether these tools are appropriate in forecasting the price trends or not.