Technical analysis is a full chapter in the NISM Series XV syllabus and a reliable source of marks once you learn the core concepts. While fundamental analysis asks what to buy, technical analysis focuses on when — using price and volume to judge market behaviour. Here are the basics you need for the exam.
What is technical analysis?
Technical analysis studies price charts and volume to forecast future price movement. Its core assumptions are:
- Price discounts everything — all known information is reflected in price.
- Prices move in trends — up, down or sideways.
- History tends to repeat — patterns recur because of consistent human psychology.
Trends: the foundation
A trend is the general direction of price.
- Uptrend: higher highs and higher lows.
- Downtrend: lower highs and lower lows.
- Sideways / range: price oscillates between horizontal levels.
The classic adage — "the trend is your friend" — captures the idea of trading with, not against, the prevailing direction.
Support and resistance
- Support is a price level where buying interest is strong enough to halt a decline.
- Resistance is a level where selling interest tends to cap a rise.
A key concept for the exam: when resistance is broken, it often becomes new support (and vice versa). This "role reversal" is frequently tested.
Moving averages
A moving average (MA) smooths price to reveal the trend.
- Simple Moving Average (SMA): average of closing prices over N periods.
- Exponential Moving Average (EMA): weights recent prices more heavily.
A widely-tested signal is the crossover:
- Golden cross — short-term MA crosses above long-term MA → bullish.
- Death cross — short-term MA crosses below long-term MA → bearish.
Candlestick patterns
Candlesticks show the open, high, low and close for a period. Common patterns include:
- Doji — open ≈ close, signalling indecision.
- Hammer — potential bullish reversal after a downtrend.
- Engulfing — a larger candle "engulfs" the previous one, signalling reversal.
Key indicators
- RSI (Relative Strength Index): momentum oscillator from 0–100. Above ~70 is often considered overbought; below ~30 oversold.
- MACD (Moving Average Convergence Divergence): shows the relationship between two EMAs; crossovers signal momentum shifts.
- Volume: confirms moves — a breakout on high volume is more reliable.
How technical analysis is tested in NISM XV
Expect conceptual, definition-based questions rather than live chart reading — for example:
- Define support, resistance, and trend.
- Identify what a golden cross or RSI level implies.
- Match a candlestick pattern to its signal.
So focus on clear definitions and the meaning of signals, not on complex trading strategies.
Practise the full technical-analysis question set on ScoreSetu — each question includes an explanation so the signals and patterns stick in memory.
Learn these basics — trends, support/resistance, moving averages, candlesticks and indicators — and the technical-analysis section of the NISM Series XV Research Analyst exam becomes a comfortable scoring area.