Bearish divergence refers to a technical pattern that occurs when there is a discrepancy between the price movement of an asset and its relative strength index (RSI) indicator. In the case of Bank Nifty on the daily chart, a bearish divergence on the RSI suggests a potential reversal or weakness in the uptrend of the index.
The RSI is a popular momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100 and is often used by traders to identify overbought and oversold conditions in an asset. When the RSI moves above 70, it is considered overbought, indicating a potential price correction, while a move below 30 suggests oversold conditions and a possible rebound.
In the context of Bank Nifty's daily chart, a bearish divergence occurs when the price of the index forms higher highs while the RSI forms lower highs. This discrepancy suggests that the buying pressure supporting the upward price movement is weakening, signaling a potential reversal or pullback in the near future.
Be cautious on upside trades.
The RSI is a popular momentum oscillator that measures the speed and change of price movements. It oscillates between 0 and 100 and is often used by traders to identify overbought and oversold conditions in an asset. When the RSI moves above 70, it is considered overbought, indicating a potential price correction, while a move below 30 suggests oversold conditions and a possible rebound.
In the context of Bank Nifty's daily chart, a bearish divergence occurs when the price of the index forms higher highs while the RSI forms lower highs. This discrepancy suggests that the buying pressure supporting the upward price movement is weakening, signaling a potential reversal or pullback in the near future.
Be cautious on upside trades.
Comment:
Divergences have their own importance...!