Chart Analysis: RSI, MACD and Moving Averages
What is chart analysis?
Chart analysis (technical analysis) evaluates historical price data and trading volume to identify buy or sell signals. Unlike fundamental analysis, company value is irrelevant — what matters is price behavior itself.
The 4 indicators at a glance
RSI — Relative Strength Index
The RSI measures whether a stock is overbought or oversold, on a scale of 0–100.
| RSI value | Interpretation | Signal |
|---|---|---|
| > 70 | Overbought | Possible short signal |
| 30–70 | Neutral | No clear signal |
| < 30 | Oversold | Possible long signal |
MACD — Moving Average Convergence Divergence
The MACD shows trend strength and direction by comparing two moving averages (12- and 26-day EMA).
- MACD line crosses signal line from below: Bullish crossover → Long signal
- MACD line crosses signal line from above: Bearish crossover → Short signal
- Histogram grows: Trend is strengthening
Moving Averages
Moving averages (SMA/EMA) smooth out price noise and reveal the underlying trend.
| Pattern | Interpretation |
|---|---|
| Price > 50-day MA > 200-day MA | Strong uptrend |
| 50-day MA crosses 200-day MA upward | Golden Cross — bullish long-term signal |
| 50-day MA crosses 200-day MA downward | Death Cross — bearish long-term signal |
| Price < 50-day MA | Short-term downtrend |
Volume
Volume confirms or invalidates price moves.
- Price rise + high volume = Strong bullish signal
- Price rise + low volume = Weak signal (potential trap)
- Price decline + high volume = Strong bearish signal
How 360° calculates chart signals
Each of the 4 indicators gives a Long (+1), Neutral (0) or Short (−1) signal. The total chart score is a weighted average:
Chart score = (RSI × 0.25) + (MACD × 0.30) + (MA × 0.30) + (Volume × 0.15)
Score > 0.2 → Long
Score < -0.2 → Short
Otherwise → Neutral
Limitations of chart analysis
- Technical signals work best in trending markets — sideways markets frequently produce false signals
- No insight into why a price moves — only how
- Short-term chart signals can be instantly invalidated by news or macro events
That is why 360° combines chart signals with 7 other methods, including fundamentals, market regime and news sentiment.