How to trade using RSI Indicator a tool?

RSI-relative strength index

   “Inventor-j.welles wilder,jr, invented in 1978”

What is Relative Strength Index (RSI)?

Relative Strength Index (RSI) is a momentum oscillator, Measuring the velocity and magnitude of direction of price movements. Momentum is the rate of the rise or fall price in RSI. It is used in computer momentum. The relative strength index was developed by j. Wellles Wilder and published in a 1978 book.

Bifurcation:

Bearish divergence occurs when price makes a new high but the RSI makes a lower high, thus failing to confirm. Bullish divergence occurs when price makes a new low but RSI makes a higher low.

How to calculate RSI? 

The smoothed moving averages should be appropriately initialized with a simple moving average.

How does RSI help in trading? 

The price oscillates between 0 and 100, traditionally the RSI is considered overbought when above 70 and over sold when below 30.

  When indicators start going above 70, then it’s called the market overbought and it signals for the sell.

   When indicators start going below 30 , then it’s called the market oversold and it’s a signal for buy.

Uptrend and downtrends:

(1)RSI Bullish-indicators survive in the range of 50-100.

(2)RSI bearish-indicators survive in the range of 0-50.

(3)RSI sideways-when indicators survive around 50,minor momentum

  Indicators pattern-double top and bottom double:

                                         

Whenever an indicator creates a double top in the range of 70-100,then is the signal of strong reversal.

Whenever an indicator creates a double bottom in the range of 0-30,then is the signal of a strong reversal.

Beauty of Fib. Retracement on NIFTY

This pullback can push price 9066 up to easily.
At a,b and c of 50% retrecement zone from where price started to move downward.

Value area with 3 control lines has plotted of parallel channel.

  • The control C1 and C2 is stronger than C3.
  • Value area is predicted by price and control price. There is more chance to continue to fall.

Nifty is follwing weekly channel since long 2005 year

Target achieved Fib Retracement:

Dealing with 4-chart “extensively research” at Reliance price…

  Volume vs. Price Action:

Points to be focus on:

  • Gap (run away type)
  • Invalid Doji (from the left to right Doji is invalid because of low volume compare to previous candle)
  • sequence of tails (sign of existence negativeness)
  • Interruption began to push price upward.

Red Alert : sellers will take action on the Red Alert zone 1542 to 1490, and price will T1 as target.

Fibonacci Retracement:

Confluence zone 1353 to 1329 target
next target 1250 nearby if sellers will continue.

Wave analysis theory (unconfirmed):

Parallel Channel and Project:

T1 -1375 to 1380

It may be noted that this stock is follow the channel, JustDial.

CUMMINSIND india given to buy 505 and (yesterday high was 589)
AARTIIND given to buy for subscribers at 785 and its was achieved target 890.
BAJANFINSV is also followed our levels…

Yeah, Do you want what we have written for Spot nifty?
We have given target and resistance for sell nifty 12286 and (all time high is 12291).

In coming days, we are working TATASTEEL, VOLTAS, ITC, MARICO etc.

If the previous record of this stock is checked, it may be noted that this stock is always following the channel. Presently price very near the value low where investors can take their position.

The current price is 550 – Support of value 525 nearby = 25 points patience is required.

You can make your Trade Setup by using this distance of the 25 points.

When this stock create up spike, generally move more than 35% up.

I will update shortly for paid subscribers the daily chart for this stock

Buying is initiated on this stock footprint view for AARTIIND

We have seen here two Flag Pattern, One Channel and Triangle on this stock.

  • While Flag Pattern found in up trend and present formed is a triangle at value low of the channel.
  • Almost everything is positive on this stock at the value low of the channel. As per triangle target is 837 nearby. After breaking trinagle, I expect here flag pattern again with the target of 904-923.

Stock is forming triangle pattern on long timeframe.
We are seeing tight channel and the price is trading at the value low(lower line of the channel). This means, investors is ready to enter if volume increase price can make wave (5) as mentioned in the chart.
The primary trend is up on this stock.

Two Trade SETUP is as per below levels…

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