In the Bangladesh stock market, success isn’t just about luck or following tips. If you want to trade smarter, one powerful skill is learning how to read charts.
Whether you’re just starting or already own shares, technical analysis can help you decide:
👉 When is a good time to buy?
👉 When should you consider selling?
The good news? You don’t need to be a professional analyst. With a few simple tools, you can understand market behavior and spot better entry points.
🔍 Simple Chart Tools You Should Know
📉 Moving Averages (MA)
What is it?
It’s the average price of a stock over the past 20, 50, or 200 days.
Why it matters:
- If the line is going up → the stock might be in an uptrend
- If a short-term line (e.g. 20-day) crosses above a long-term line (e.g. 50-day), that’s a “golden cross” – a bullish signal
Example:
If BRAC Bank stays above its 50-day MA, it usually means strong buying interest.
🔄 RSI (Relative Strength Index)
What is it?
It shows if a stock is “overbought” or “oversold” using a score from 0 to 100.
How to read it:
- RSI over 70 → may be overbought (price could drop)
- RSI under 30 → may be oversold (price might bounce)
Popular stocks like Renata or KDS Accessories are often tracked using RSI for quick buy/sell signals.
📊 MACD (Moving Average Convergence Divergence)
What is it?
It compares two moving averages (usually 12-day and 26-day) to show momentum.
How to use it:
- MACD crossing above signal line → possible uptrend
- MACD crossing below → possible downturn
Useful for volatile sectors like telecom or tech stocks.
🧱 Support & Resistance Levels
What are they?
- Support: a price level where buyers usually enter
- Resistance: a level where selling often happens
Example:
If Grameenphone bounces every time it hits BDT 280, that’s likely a support level.
🔧 Combine Tools for Better Signals
Don’t rely on just one indicator. Combine two or three for stronger confirmation:
✅ Use moving averages to follow trends
✅ Use RSI & MACD to spot reversals or momentum
✅ Use support/resistance to decide when to enter or exit
Example Strategy:
If a stock is above its 50-day MA, has RSI near 40, and MACD is turning up → that might be a low-risk buying opportunity.
🇧🇩 What Makes the Bangladesh Market Unique?
Bangladesh’s stock market has its own rhythm:
- Export-driven stocks (like pharma and RMG) are sensitive to global news
- Currency changes (BDT/USD) impact profits
- Political events often cause quick market swings
- Low-volume stocks may show false signals – stick to actively traded shares
That’s why chart reading helps you stay focused, even during uncertainty.
⚠️ Common Mistakes to Avoid
❌ Relying on just one indicator
❌ Ignoring trading volume (low volume = weak signals)
❌ Reacting without confirmation from other tools or news
Remember: Technical analysis doesn’t predict the future. It helps you understand the probabilities, not the guarantees.
🙋♀️ Frequently Asked Questions
Q: Can charts tell me what will happen next?
A: No—they show what might happen based on past patterns. Use them with logic and market news.
Q: How often should I check charts?
A: Long-term investors: once a week is enough.
Short-term traders: daily or more often.
Q: Does technical analysis work on all stocks?
A: It works best on liquid, high-volume stocks. Avoid using it on thinly traded or “quiet” stocks.
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