When university finance students look at past price data, they need to pay attention to some important signs that help them understand how stocks have performed and what they might do in the future. Knowing these signs is important for making smart investment choices and doing technical analysis well.

First up are price trends. Students should learn about different types of trends: upward, downward, and sideways. An upward trend means that people are feeling good about investing, while a downward trend can signal that there are risks. To figure out the trend, students can use techniques like moving averages, which help smooth out price changes over time. One common type of moving average is the simple moving average (SMA). It looks like this:

$$\text{SMA} = \frac{\sum_{i=1}^n P_i}{n}$$

In this formula, $P_i$ are the price points being looked at, and $n$ is how many time periods they are including.

Next, students must think about support and resistance levels. Support levels are prices where a stock usually stops falling and might go back up because more people want to buy it. Resistance levels are prices where a stock often stops going up because people start selling it. By finding these levels, students can better predict when prices might change. For example, if a stock keeps hitting a resistance level without going higher, it signals that it might be a good time to sell. Knowing both levels helps in setting up smart buy and sell orders.

Another key area is trading volume. This shows how many shares or contracts are being traded in a certain time. High trading volume can mean that there is strong belief among traders about where the price is headed. If the volume drops when the price goes up, it can hint that the trend might be fading. Students often look at volume alongside price changes. One method they use is called On-Balance Volume (OBV), which helps link volume with price trends.

Next on the list is volatility. This measures how much the price of a stock goes up and down over time. Students can use indicators like the Average True Range (ATR) to understand this better. High volatility means more risk but can also open doors for good trading opportunities. The ATR can be calculated like this:

$$\text{ATR} = \frac{1}{n} \sum_{i=1}^n \text{TR}_i$$

Here, $TR$ (True Range) measures volatility by looking at the biggest number from three different calculations: the current high minus the current low, the absolute value of the current high minus the previous close, and the absolute value of the current low minus the previous close.

Momentum indicators are also important for technical analysis. One of the big ones is the Relative Strength Index (RSI), which shows how much and how quickly a stock's price has changed over time. The RSI ranges from 0 to 100, with levels of 30 (oversold) and 70 (overbought) signaling where prices might change direction. The formula for RSI is:

$$\text{RSI} = 100 - \frac{100}{1 + RS}$$

In this case, $RS$ (Relative Strength) is found by taking the average of price increases over a certain number of days and dividing it by the average of price decreases over the same number of days.

Students should also pay attention to chart patterns. These patterns can show how prices might move in the future. Common patterns include head and shoulders, flags, and double tops/bottoms. These shapes can give insights into how investors might act and what could happen next based on past behavior.

Additionally, understanding confluence is important. Confluence happens when multiple indicators come together to suggest a likely price move. For example, if a stock is nearing a strong resistance level with low trading volume and an RSI around 70, this could hint at a possible price change.

Finally, risk management is super important in trading and investing. Knowing the risk-reward ratio is crucial. A good ratio is often 1:3, meaning if a trader risks $1, they might potentially gain$3. Setting stop-loss orders based on indicators and personal comfort with risk can help prevent big losses.

In summary, university finance students should focus on key indicators like price trends, support and resistance levels, trading volume, volatility, momentum indicators, chart patterns, and risk management strategies. Each of these elements gives valuable clues for looking at past price data and predicting future price movements of stocks. Learning these indicators helps students tackle the world of technical analysis, leading to better investment decisions.