RSI Indicator Chart Setups and Trend-Lines
Traders can draw trendlines on the RSI just like they do on price charts. RSI trend lines are drawn the same way as on the chart: by connecting highs or lows on the RSI Indicator.
RSI TrendLines and Trend-lines on Stock Indices Charts
RSI Setups in Indices Trading
RSI chart shapes, like head and shoulders or triangles, that you can't see on the price chart often appear on the RSI indicator instead.
The RSI indicator frequently manifests recognizable chart formations, such as head and shoulders patterns or triangles, some of which might not be immediately apparent on the actual price chart. As illustrated in the ensuing graphic, the configuration signifying a Reverse Head & Shoulders reversal is clearly depicted utilizing this RSI indicator for indices trading.
Index Chart Setups on RSI Technical Chart Indicator
Support and Resistance Zones using RSI Indicator
Support and resistance lines often show clearer on RSI than on price charts.
In an uptrend, support levels hold firm. A break means prices fall through, and the uptrend ends.
In a falling trend, resistance levels hold strong. If price breaks them, the stock surges past, and the downtrend turns around.
Support and Resistance Zones Shown on the RSI Indicator
In the previous trading illustration, the reversal from a downtrend to an uptrend occurred subsequent to the breach of the third resistance level. Conversely, the uptrend was broken and reversed when the sixth support level was overcome, leading to a break of the preceding upward trend line.
Learn more from lessons, tutorials, and courses.
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