Which of the following is not the correct technical indicator?
Click on the arrows to vote for the correct answer
A. B. C. D.D
The correct answer is D. Broadening formation.
Moving Average Convergence/Divergence (MACD), Relative Strength Index (RSI), and On Balance Volume (OBV) are all widely used technical indicators in technical analysis of financial markets.
MACD is a momentum indicator that shows the relationship between two moving averages of prices. It is calculated by subtracting the 26-day exponential moving average (EMA) from the 12-day EMA. The result is then plotted on a chart with a 9-day EMA, which is called the signal line. Traders use the MACD to identify changes in trend, momentum, and potential buy/sell signals.
RSI is a momentum oscillator that measures the speed and change of price movements. It compares the magnitude of recent gains to recent losses to determine overbought or oversold conditions. The RSI ranges from 0 to 100, with readings above 70 indicating overbought conditions, and readings below 30 indicating oversold conditions.
OBV is a volume-based indicator that measures buying and selling pressure by adding or subtracting volume to a running total based on whether prices close higher or lower. OBV can be used to confirm price trends, identify divergences, and detect potential reversals.
Broadening formation is not a technical indicator. It is a chart pattern that occurs when the price of a security moves in a series of higher highs and lower lows. This pattern is characterized by increasing volatility and uncertainty, and traders may use it to identify potential reversal points or market indecision.
In summary, while MACD, RSI, and OBV are commonly used technical indicators, broadening formation is not a technical indicator but rather a chart pattern. Therefore, the correct answer is D. Broadening formation.