Many traders think that an extreme overbought/oversold reading indicates a stock index top/bottom.
Very often espicially with a rising stock index, an extreme RSI reading implies continuation of the trend.
Note in late 2019 the persistant bull trend had a very overbought reading, yet the final top wasn't in place until a double bearish RSI divergence.
The same phenomenon happens in down trending stock indices - note the double bullish RSI divergence in 2020.
Bearish RSI divergences are less common with individual stocks because they have a greater chance for blowoff tops.
When looking for a stock index top be patient, wait for at least one RSI bearish divergence before selling.
Mark
Very often espicially with a rising stock index, an extreme RSI reading implies continuation of the trend.
Note in late 2019 the persistant bull trend had a very overbought reading, yet the final top wasn't in place until a double bearish RSI divergence.
The same phenomenon happens in down trending stock indices - note the double bullish RSI divergence in 2020.
Bearish RSI divergences are less common with individual stocks because they have a greater chance for blowoff tops.
When looking for a stock index top be patient, wait for at least one RSI bearish divergence before selling.
Mark
면책사항
해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.
면책사항
해당 정보와 게시물은 금융, 투자, 트레이딩 또는 기타 유형의 조언이나 권장 사항으로 간주되지 않으며, 트레이딩뷰에서 제공하거나 보증하는 것이 아닙니다. 자세한 내용은 이용 약관을 참조하세요.