I get how price and RSI trends were diverging, but RSI was headed down into oversold territory. Trying to understand why this didn't signal a buying opportunity. Or was it just the buying opportunity to come after the dump?
Thanks!
ROCKET_RACKS
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@thmacmill, I just created a new post explaining Bearish RSI Divergences in detail... I'm going to publish a Bullish Divergence example this weekend, but for now take a look at my newest post and your question should be answered. :)
KSECK
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So your saying that everything we’ve learned to do with divergences is opposite? It went up for a short time, but then slammed down. Same thing if the price makes a lower high but the RSI makes higher high? Would be expected as bearish? But you are saying it is bullish and follow RSI?
gmickey11
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Only they where bullish divergences
ROCKET_RACKS
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@gmickey11, that’s incorrect. A bullish divergence looks exactly the opposite... or did you mean that the PRICE was a bullish divergence with the RSI? That’s the only thing I can think of to understand what you meant.
Either way, when people talk about “divergences” in the RSI... it’s best to think of the RSI being the one who tells the Truth, and the Price is lying. The price will eventually “catch up” with the RSI if there is a Divergence present. You can look on AMZN’s Daily chart and go back to March 17th, 2020... THAT is an example of a Bullish Divergence. The PRICE makes a lower low at $1,626 but you can look at the RSI and you can clearly see that it is NOT making a lower low... and what happens to AMZN’s price a month later on 4/16/20? It rockets up to $2,461! The Price ended up catching up to the Bullish RSI in that case...
In today’s situation however, the exact opposite is true. Clear Bearish Divergence in the RSI... but the price hadn’t “caught up” to it yet as of the close. Post market opens up, and price corrects downwards to finally sync up with the RSI.
QUANDRANTS
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good eye finding some correlation on the 4Hr. It's smoothed out a bit on the daily, harder to spot, but I looked at these RSI pings again, and I think this is a good combo trend to look out for. Technicals here half the story tho. The St. loves this stock. It's a piñata full of money. They will still PT higher, yet sanguine. Catches a bid going into back to school. Shopping in stores blows, couple that with summertime travel, it's choppy trading for a bit.
If they guided better being Jassy's 1st Q (he went conserva), and if they beat on revs prior the thesis doesn't hold weight.
Stock will be bought. Tomorrow might suck a little. meh. another day.
HotCharts
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The indexes will crash soon! Everything is overbought & over valued. Move into cash immediately.
QUANDRANTS
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@HotCharts, naw, world isn't ending, rates remain low, TINA. Have fun sitting on a worthless dollar. At worst, buy materials.
Thanks!