Fundamentals (earnings, margins, valuation) tell you whether a company is a good business. Technicals tell you something different: what the stock's own price history suggests about supply and demand for the shares right now. Here's what the core indicators actually mean.
RSI: is the stock overbought or oversold?
The Relative Strength Index (RSI) is a 0-100 score measuring how sharply a stock has moved recently, relative to its own recent price swings. Above 70 is generally read as "overbought" — the stock has risen fast enough that a pause or pullback becomes more likely. Below 30 is "oversold" — the reverse.
RSI isn't a prediction — it's a measure of momentum extremity. A stock can stay "overbought" for a long stretch during a genuine strong trend; RSI is one input to weigh, not a standalone buy/sell signal.
Moving averages: where's the trend, smoothed out?
A moving average is simply the average closing price over a set window — most commonly 50 days (shorter-term trend) and 200 days (longer-term trend). Smoothing out day-to-day noise makes the underlying direction easier to read.
The relationship between the two carries its own meaning: the 50-day average crossing above the 200-day (a "golden cross") is widely watched as a bullish trend-shift signal; the reverse ("death cross") as bearish. Neither guarantees anything — they're pattern-recognition heuristics with a long track record of imperfect signals, not laws of physics.
Support and resistance: where has the crowd acted before?
Support is a price level where a stock has repeatedly stopped falling and bounced back up — buyers have shown up there before. Resistance is the mirror image: a level where selling has repeatedly capped further gains.
These aren't fixed lines a stock literally can't cross — they're historical evidence of where the balance of buyers and sellers has shifted before, which sometimes (not always) repeats.
The honest limitation
Technical analysis reads price history, not the business behind the ticker — it can't tell you whether a company's next earnings report will beat or miss, or whether its balance sheet can weather a downturn. That's exactly why Investingg AI's research score treats Technical as one of six pillars, weighted well behind Financial Quality, Growth, and Valuation, rather than letting a short-term chart pattern outweigh what the actual business is doing.