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NISM Certifications · NISM-Series-XV: Research Analyst

Technical Analysis for the NISM Research Analyst Exam

Technical analysis studies price and volume data on charts to judge trend direction and likely turning points. For NISM-Series-XV, you solve questions by knowing definitions, chart types, patterns, indicator formulas and signal rules, then matching the question's data to the correct rule. Precision on terms matters more than market opinion.

What this chapter covers

Technical Analysis is the largest chapter in the NISM-Series-XV syllabus, carrying 15 marks in the chapter weightages. It covers how analysts read price and volume history: Dow Theory, chart types, trends, support and resistance, patterns, moving averages, oscillators, volume tools, and wave and breadth theories.

The chapter is mostly definition and rule based. You need to know what each tool measures, how it is built, and what signal it gives. Some questions need a small calculation, such as a simple moving average. Others test whether you can read a short description of a pattern or indicator and name it.

It connects to the rest of the paper in a clear way. Fundamental analysis chapters (Economic, Industry, Company, Valuation) ask what an asset is worth. This chapter asks when and at what price the market is acting. It also links to Risk and Return, since stop-losses and trend strength relate to risk, and to the Qualities of a Good Research Report, since technical views must be stated with levels and reasoning. The paper has 80 one-mark MCQs and 5 case-based questions of 4 questions each, with negative marking of 25% of the marks assigned to a question, so a wrong guess costs you.

At 15 marks, Technical Analysis is the single heaviest chapter in the stated weightages, ahead of Financial Analysis and Valuation Principles at 12 each. The content is also more fixed than most chapters: terms, formulas and signal rules do not change from question to question. That makes it a good place to gain marks with focused effort. Because wrong answers carry a 25% penalty, clear knowledge of the exact rules lets you answer confidently and skip only the truly unfamiliar items. The pass mark is 60%, so every secure mark here helps.

Technical Analysis: topics in the order to study them

  1. 1Introduction to Technical Analysis and Dow TheoryIt sets the core assumptions and the Dow Theory tenets that every later topic builds on.
  2. 2Chart Types and ConstructionYou must know how line, bar, candlestick and similar charts are built before you can read patterns on them.
  3. 3Trends, Support and ResistanceTrend direction and price levels are the base idea behind patterns, averages and breakouts.
  4. 4Chart Patterns and Candlestick PatternsPatterns apply trend and level concepts, so they are easier once those are clear.
  5. 5Moving Averages and Trend IndicatorsThese turn trend into numbers and give you the first calculation-style questions.
  6. 6Momentum Oscillators and Volume IndicatorsOscillators and volume tools confirm or question a trend, so they come after trend tools.
  7. 7Other Theories: Elliott Wave, Fibonacci and Market BreadthThese are the more specialised ideas, best learned last when the basics are firm.

How to prepare Technical Analysis

Treat this chapter as a set of definitions, constructions and signal rules. Build it in layers and test yourself often.

  1. Read the topics in the study order above and write a one-line definition for every term as you go.
  2. Draw each chart type and pattern by hand at least once. Drawing fixes the shape and the signal in memory.
  3. For each indicator, note three things: what it measures, how it is computed, and what a buy or sell signal looks like.
  4. Practise small calculations, such as a simple moving average over a few days, until they take under a minute.
  5. Make a table-style list in your notes of bullish and bearish patterns, and of reversal and continuation patterns, and revise it daily.
  6. Do topic-wise MCQs, then mixed sets. For every miss, write the exact rule that you got wrong.
  7. In the last days, practise case-based questions that give a short chart description and ask for the correct reading.

Common mistakes in Technical Analysis

  • Mixing up reversal and continuation patterns.

    Fix: Learn each pattern with the trend before it and the trend expected after it. Sort your notes into two lists.

  • Treating overbought or oversold readings as automatic sell or buy signals.

    Fix: Remember that oscillators can stay in extreme zones during strong trends. Look for the exact wording in the question.

  • Confusing simple and exponential moving averages.

    Fix: Link SMA to equal weights and EMA to higher weight on recent prices. Practise one SMA calculation daily.

  • Ignoring volume when judging a breakout or trend.

    Fix: For every pattern and trend rule, ask what volume should look like if the signal is genuine.

  • Reading candlestick colour or body size wrongly.

    Fix: Rebuild each candle from open, high, low and close values before choosing the answer.

  • Guessing on unfamiliar theory questions.

    Fix: Give these topics a short, fixed revision slot so you know the basic rules and can skip only when truly unsure.

Last-day revision: Technical Analysis

  • Technical analysis studies price and volume history to judge trend and timing; it does not value a business.
  • Dow Theory sees the market discounting all information and moving in primary, secondary and minor trends.
  • Candlestick charts show open, high, low and close for each period.
  • Support is a price zone where buying tends to halt a fall; resistance is where selling tends to halt a rise.
  • A broken support level often turns into resistance, and a broken resistance into support.
  • A simple moving average is the sum of closing prices over N periods divided by N.
  • An exponential moving average gives more weight to recent prices than a simple moving average does.
  • A price crossing above its moving average is read as bullish; crossing below is read as bearish.
  • Oscillators such as RSI and Stochastic show momentum and overbought or oversold zones, and can stay extreme in strong trends.
  • Volume that confirms the price move strengthens the signal; a move on weak volume is less reliable.
  • Reversal patterns signal a change in trend; continuation patterns signal a pause before the trend resumes.
  • Fibonacci retracement levels and Elliott Wave counts are tools for estimating pullback and trend structure, not certainties.

Technical Analysis practice questions

Technical Analysis in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Technical Analysis: frequently asked questions

How many marks does Technical Analysis carry in NISM-Series-XV?

The stated chapter weightage for Technical Analysis is 15 marks, the highest of any chapter in the paper. It is worth planning your study time around it.

Do I need to do calculations in this chapter?

Yes, but they are small. Expect simple items such as a moving average from a few closing prices. Most other questions test definitions, patterns and signal rules.

Is there negative marking in the Research Analyst exam?

Yes. A wrong answer costs 25% of the marks assigned to that question. The exam has 100 marks, runs for 2 hours and needs 60% to pass.

Which topic should I start with?

Start with the introduction and Dow Theory. It gives the base assumptions and terms you need for charts, trends, patterns and indicators that follow.

How should I memorise chart patterns?

Draw each one and note the trend before it, the signal it gives, and how volume behaves. Group them as reversal or continuation, and revise the groups regularly.