Technical Analysis Checklist: Reviewing Indicator Context

This checklist item directly applies the combination framework covered in the previous unit's opening lesson — reviewing readings from a trend indicator (such as a moving average), a momentum indicator (such as MACD, RSI, or KDJ), and a volatility indicator (such as Bollinger Bands or ATR), rather than checking indicators in isolation from each other.

As covered in the RSI and KDJ units, momentum readings like overbought/oversold levels should be interpreted alongside the trend established in the first checklist item — being cautious about treating every overbought or oversold reading as an automatic signal during a strong trend, as covered in those units' closing lessons.

This step can also involve checking for divergence — covered across the MACD, RSI, KDJ, and OBV units — between price and the relevant indicators, while remembering that divergence is a commonly discussed observation, not a guaranteed reversal signal.