Technical Analysis for Beginners

Learn how to read charts using Support & Resistance, 3EMA, 1SMA, Stoch RSI, and MACD — the beginner-friendly way.

Hey there, chart-watching investors👋

You’ve mastered the “what to buy” part with Fundamental Analysis (FA) — solid, profitable companies that pass your 4S test.

But here’s the truth: even the best company’s stock price doesn’t move in a straight line.
So the next question is... when to buy (and when to chill)? 😅

That’s where Technical Analysis (TA) comes in.

If fundamentals tell you the story of a business, technicals tell you the mood of the market — are traders greedy, fearful, or about to flip direction?

Let’s break this down with the 5 chart tools in www.tradingview.com

🧱 1️⃣ Support & Resistance — Your Market GPS

Think of support as the floor (where price tends to bounce up) and resistance as the ceiling (where price tends to fall back down).

Support (Floor) & Resistance (Ceiling)

📉 When the price hits support, buyers usually step in.
📈 When the price nears resistance, sellers often take profit.

💡 Beginner tip:
Draw these lines on TradingView by connecting recent swing highs (resistance) and swing lows (support).
Buy near support, sell near resistance.
Simple, but powerful.

📊 2️⃣ Moving Averages — The Trend Compass

We use Exponential Moving Averages (EMAs) and Simple Moving Average (SMA) to see where the market’s heading.

👉 In your TradingView chart, set up:

  • 3 EMAs: 21, 50, 100, 200

  • 1 SMA: 200

Exponential & Simple Moving Averages

These act like speed indicators of price movement.

💬 How to read them:

  • If the price is above all EMAs & SMA, the trend is bullish — momentum is strong.

  • If the price is below, trend is bearish — momentum is weak.

  • If shorter EMAs (like 20 or 50) cross above longer ones (like 100 or 200 SMA), that’s a Golden Cross — a bullish signal.

  • When they cross below, that’s a Death Cross — bearish alert! ⚰️

📈 Use these to confirm trend direction before entering or exiting a trade.

🎯 3️⃣ Stochastic RSI (3,3,14,14) — Catching Overbought & Oversold Zones

The Stochastic RSI helps you spot short-term turning points — when prices are too hot or too cold.

Here’s how beginners can use it effectively:

Overbought & Oversold Zones

  • The indicator moves between 0 and 100.

  • Above 80 = Overbought Zone (price may soon pull back)

  • Below 20 = Oversold Zone (price may soon bounce)

💡 When to act:

  • If the blue line crosses below 80, it may be time to take the profit.

  • If it crosses above 20, it may be time to look for an entry.

Think of it as the mood swing detector of the market — when it’s overexcited (80+), expect a cooldown; when it’s too depressed (20-), expect a rebound. 😎

🔵 4️⃣ MACD (12, 26) — The Momentum Meter

The MACD (Moving Average Convergence Divergence) tells you if the market’s momentum is gaining or fading.

It has two lines and a histogram:

The Momentum Meter

  • Blue Line (MACD Line) = Short-term momentum

  • Red Line (Signal Line) = Slower, confirming momentum

  • Histogram Bars (Green / Red / Pink) = Strength of the trend

💬 How to read it:

  • When the blue line crosses above the red line, it’s a bullish crossover — momentum shifting up.

  • When the blue line crosses below the red, it’s a bearish crossover — momentum turning down.

  • Green histogram bars = bullish strength

  • Red histogram bars = bearish pressure

  • Pink bars = fading momentum — trend may reverse soon.

📈 Combine MACD with Stochastic RSI for stronger confirmation:
If both show bullish signs (RSI below 20 and MACD cross up), that’s your green light!

Spotting Bullish Signs in TradingView

🧠 The SM Cafe “CUP” Formula for Technical Beginners

Here’s a simple way to remember it all — just think CUP (because everything tastes better at SM Cafe ☕):

✅ C – Check the Chart zones (Support & Resistance)
✅ U – Understand the Underlying trend (EMA & SMA)
✅ P – Pinpoint entry/exit with Price momentum tools (Stoch RSI & MACD)

Once you master this, you’ll stop guessing when to buy — and start timing your trades with confidence.

🌟 Final Sip of Wisdom

Technical analysis isn’t about predicting the future — it’s about reading the present.

Just like a barista learns to “read the pour,” a good trader learns to read the chart.

☕ When fundamentals tell you what to buy,
📈 technicals tell you when to buy (and when to take profits).

So brew both together, and you’ll get a perfect blend of logic and timing — the recipe for consistent results.

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SM Cafe: Where finance meets flavor — and clarity meets confidence.