As of 03/18/2024
  Indus: 38,790 +75.66 +0.2%  
  Trans: 15,418 -81.05 -0.5%  
  Utils: 853 +3.06 +0.4%  
  Nasdaq: 16,103 +130.28 +0.8%  
  S&P 500: 5,149 +32.33 +0.6%  
YTD
 +2.9%  
-3.0%  
-3.2%  
 +7.3%  
 +8.0%  
  Targets    Overview: 03/13/2024  
  Down arrow38,000 or 39,350 by 04/01/2024
  Up arrow16,300 or 15,350 by 04/01/2024
  Up arrow885 or 830 by 04/01/2024
  Down arrow15,200 or 16,600 by 04/01/2024
  Up arrow5,250 or 5,000 by 04/01/2024
As of 03/18/2024
  Indus: 38,790 +75.66 +0.2%  
  Trans: 15,418 -81.05 -0.5%  
  Utils: 853 +3.06 +0.4%  
  Nasdaq: 16,103 +130.28 +0.8%  
  S&P 500: 5,149 +32.33 +0.6%  
YTD
 +2.9%  
-3.0%  
-3.2%  
 +7.3%  
 +8.0%  
  Targets    Overview: 03/13/2024  
  Down arrow38,000 or 39,350 by 04/01/2024
  Up arrow16,300 or 15,350 by 04/01/2024
  Up arrow885 or 830 by 04/01/2024
  Down arrow15,200 or 16,600 by 04/01/2024
  Up arrow5,250 or 5,000 by 04/01/2024

Bulkowski's RSI Trading Setups

The following page is only a faction of the complete analysis of the RSI indicator. Check here to download a compressed Word document that includes pictures and in-depth analysis.

 

Introduction
Trading: Overbought and Oversold Signals
Trading: Divergence
See Also

 

RSI Trading Setups: Introduction

The Wilder relative strength index (RSI) is a price momentum indicator that is useful for intraday trading. Values above 70 mean price is nearing a top or correction of the uptrend. Values below 30 mean price is nearing a bottom or retrace of the decline. The RSI's primary value is calling the turning points in a trading range market (between support and resistance).

As an overbought, oversold indicator, it works 75% of the time, but it says nothing about how far price will travel. As a divergence indicator, where the indicator diverges from price and points to a new trend, it proved accurate and timely, working between 76% and 82% of the time.

Here are some trading rules that should help with profitability.

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RSI Trading: Overbought and Oversold Signals

Here are the trading rules for using RSI as an overbought or oversold indicator. These assume a 14-period look back on the RSI and a 10-day intraday price chart.

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RSI Trading: Divergence

Looking at your charts, it may be unclear whether you look for divergence along the price peaks or valleys. Here's a system that works.

Here are the rules for trading on bullish divergence.

Here are the bearish divergence trading rules. They are similar to the bullish divergence rules.

-- Thomas Bulkowski

Top of page

See Also

 

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