Study notebook · Indian markets edition
Charts, F&O & Fundamentals, doodled.
From a single candle to option strategies on Nifty, Bank Nifty and Sensex, and from a balance sheet to a DCF valuation. Every concept has its own live chart: hover or tap any candle to read its open, high, low, close and indicator values.
Flip the toggles, drag the sliders, build option payoffs, trade a hidden chart candle by candle and play the pattern game. Every correct answer earns XP, and you level up from Rookie to Market Wizard.
Read me first: These notes are for education only and are not investment advice or a recommendation to buy or sell any security. Stock names are used to give the examples Indian context, but the chart data on those teaching charts is simulated: neither the candles nor the price levels are actual market prices. Charts built from real historical data (the case files and investing chapters) say so on the chart.
Course map jump anywhere
What is Technical Analysis?
Reading the footprints buyers and sellers leave on a chart
Technical analysis (TA) is the study of price and volume to judge where the price is more likely to go next. A fundamental analyst asks "what is HDFC Bank worth?" A technical analyst asks "what are buyers and sellers of HDFC Bank doing right now, and who is winning?"
TA vs FA in one table
| Technical Analysis | Fundamental Analysis | |
|---|---|---|
| Question | When to buy or sell? | What to buy? |
| Looks at | Price, volume, patterns, indicators | Earnings, balance sheet, management, valuation |
| Time frame | Minutes to months | Months to years |
| Main tool | Charts | Annual reports, ratios (P/E, ROE) |
| Best combo | Use FA to pick a strong company and TA to pick a good entry and exit. | |
Dow Theory: the grandfather of TA
Charles Dow's ideas (late 1800s) still sit underneath almost every modern tool:
- The market has three trends: primary (months to years), secondary (weeks to months, the pullbacks) and minor (days).
- Primary trends have three phases: accumulation, public participation (markup) and distribution.
- Indices must confirm each other (in India: if Nifty makes a new high, Bank Nifty should agree).
- Volume must confirm the trend: rising in the direction of the trend.
- A trend is in force until a clear reversal signal appears.
The market cycle: 4 phases
Toggle each phase on the chart. Smart money buys quietly in accumulation, the crowd chases in markup, smart money sells to the crowd in distribution, and late buyers get trapped in markdown.
Chart Types & Timeframes
Same data, four ways to look at it
Below is the same two months of simulated RELIANCE data drawn four different ways. Switch between them and notice what each one hides or shows.
Line chart
Joins only the closing prices. Clean and great for spotting the big trend, but it hides the high, low and open.OHLC bar
Vertical line = high to low. Left tick = open, right tick = close. Same information as a candle, harder to read quickly.Candlestick
Japanese rice traders' invention. The coloured body shows instantly who won the session. This is what we use in the rest of these notes.Heikin-Ashi
"Average bar". Smooths the noise so trends look like long runs of one colour. Its prices are averages, not real prices, so never place orders off them.Timeframes: pick the one that matches your holding period
| Trader type | Holding period | Chart for trend | Chart for entry |
|---|---|---|---|
| Scalper | Seconds to minutes | 15 min | 1 min / 3 min |
| Intraday trader | Within 9:15 am to 3:30 pm | 1 hour / 75 min | 5 min / 15 min |
| Swing trader | 2 days to a few weeks | Weekly | Daily / 1 hour |
| Positional investor | Months | Monthly | Weekly / daily |
Anatomy of a Candlestick
Four prices, one story: open, high, low, close
- Body = distance between open and close. A big body means strong conviction.
- Upper wick (shadow) = buyers pushed up, but sellers pushed back. That is rejection of higher prices.
- Lower wick = sellers pushed down, but buyers bought the dip. That is rejection of lower prices.
- Colour: green/hollow = closed higher than it opened. Red/filled = closed lower.
Candle builder play with it!
Drag the four sliders. The notebook names the candle you build and explains what it says about buyers and sellers.
Single-Candle Patterns
One candle, one message, but only at the right place
Pick a pattern. Each one is shown in its proper context on a simulated chart of an Indian stock, with the pattern circled.
Two-Candle Patterns
The second candle overrules the first
Two-candle patterns show a shift of control: one side dominates the first candle, the other side takes over in the second. The more completely the second candle "erases" the first, the stronger the signal.
| Pattern | Where it must appear | Key test | Bias |
|---|---|---|---|
| Bullish engulfing | After a fall / at support | Green body fully covers previous red body | Bullish |
| Bearish engulfing | After a rise / at resistance | Red body fully covers previous green body | Bearish |
| Piercing line | After a fall | Opens below the prior low, closes above the prior body's midpoint | Bullish |
| Dark cloud cover | After a rise | Opens above the prior high, closes below the prior body's midpoint | Bearish |
| Bullish / bearish harami | After a trend | Small body sits inside the previous big body (the trend is losing steam) | Reversal warning |
| Tweezer bottom / top | At support / resistance | Two candles with (almost) the same low / high | Reversal |
Three-Candle Patterns
Slower to form, more reliable
Three-candle patterns tell a complete story: trend → hesitation → reversal. Because they take longer to form, they filter out many false signals.
Continuation & Power Candle Patterns
Not every pattern is a reversal. Some tell you the trend is about to accelerate.
Reversal patterns get all the attention, but in a strong trend the money is made by staying in. These patterns help you spot a healthy pause, or a violent shift that leaves no time to think.
Pin Bars, Inside Bars & NR7
The price-action trader’s favourite bars
Western price-action traders describe candles by what they do, not by Japanese names. Four bars matter most:
Pin bar
A long "nose" (wick) at least 2/3 of the bar, poking through a level and rejected. It is the hammer/shooting-star family, judged by how far it sticks out from the surrounding bars.Inside bar
A bar whose high and low sit inside the previous bar (the "mother bar"). A pause, a coil. Trade the break of the mother bar.Outside bar
A bar whose range swallows the previous bar’s high and low. A sudden expansion that often marks a turn.NR7
The narrowest range of the last 7 bars. Volatility has dried up. Place orders above the high and below the low: the breakout side wins.About This Edition: Sources & Disclaimer
Read this once
Data cut-off
All market data in this edition ends on 30 September 2026, in line with SEBI’s requirement that educational content use price data at least 30 days old.
Where the data comes from
| What | Source |
|---|---|
| Nifty 50, Nifty Bank, gold, small-cap and foreign-ETF history | Net asset values (NAVs) published by AMFI and the fund houses: UTI Nifty 50 Index Fund, Nippon India ETF Gold BeES and Bank BeES, Motilal Oswal Nifty Smallcap 250 and S&P 500 Index Funds, and the six India-listed foreign ETFs. NAVs include dividends and are net of fund costs, so they differ slightly from index levels. |
| USD/INR | US Federal Reserve, H.10 release (FRED series DEXINUS) |
| US and Ireland-listed ETF returns | Issuers’ published performance as of 30 Sep 2026 (Vanguard, State Street, Invesco, Schwab, VanEck, iShares) |
| Quoted prices, index levels and ETF premiums | Press reports (PTI, Reuters, Business Standard, Business Today, INDmoney) and NSE/BSE/SEBI publications |
| Yes Bank chart | Illustrative path through reported prices, clearly labelled |
| All other charts | Simulated data, labelled “simulated” on each chart |
Trademarks
Nifty indices are owned by NSE Indices Ltd; Nasdaq-100 and Nasdaq Q-50 by Nasdaq, Inc.; S&P 500 by S&P Dow Jones Indices; Hang Seng indices by Hang Seng Indexes Company; NYSE FANG+ by ICE. Fund and company names belong to their owners. This notebook is not affiliated with or endorsed by any of them.
Licence
© 2026 Momentum Deck. Licensed for the personal use of the purchaser, on one device at a time. Copying, sharing, screenshotting, recording, reselling or uploading this notebook or any part of it is not permitted. Every screen carries the purchaser’s watermark.