RSI Trading Indicator Stock Indices Chart Patterns & Indices Trend Lines

Stock Indices traders can plot trend lines on the RSI in the same way as you can plot trend lines on the price charts. RSI trend lines are plotted the same way trend lines are plotted on the chart; by joining consecutive highs of the RSI indicator or consecutive lows on the RSI Indicator.

RSI Trend Lines and Stock Indices Trend lines on Stock Indices Charts

RSI Chart Patterns in Stock Indices Trading

RSI Chart patterns such as head and shoulders patterns or triangle chart patterns which are not evident on the price chart are often formed on this RSI indicator.

RSI indicator also often forms Stock Indices chart patterns such as head and shoulders or triangles chart patterns that may or may not be visible on the price chart. As shown on the chart below the Reverse Head and Shoulders reversal formation is clearly shown on this RSI indicator.

Indices Chart Patterns on RSI Chart Indicator

Support & Resistance Levels using RSI Indicator

Sometimes Stock Indices chart levels of support & resistance levels are demonstrated better on the RSI indicator than on the price chart.

In an upward market trend the support levels shouldn't be broken at any one time, if they are broken then price will also break the support levels and the upward trend is going to reverse.

In a downward trend the resistance levels should not be broken, if they are broken then price will also break the resistance levels, & the downward trend is going to reverse.

Support & Resistance Levels on RSI Indicator

In the example above when the third resistance level was broken the downward trend reversed to an upward trend and when the sixth support was broken the upward market trend reversed & broke the upward trend line.

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