Shown on the 65m chart, RSI crossed over 50, came back to test it twice, and gradually moved higher. Normally this "double dip" test plus a trade above the signal candle results in a strong move higher. In this case GME could move to 218-220 (white bar) to complete an inverse head & shoulder pattern, but first price has to get over 205 (dashed line).
On the daily chart there is a long bullish engulfing candle off the 50sma, which corresponds to RSI dipping below 50 and crossing back over. The 26 March candle triggered long with a trade higher than the signal candle (25 March). Price action seems to be taking a pause after last week's move up from 120.
A close over 26th open, 197.68, creates a nice 3-candle pattern with price closing back over 20sma. Candle patterns add strength (or caution) to other indicators; I do not use them as stand alone indicators.
Thank you.
So above 50 signifies a price move? Is this generally always the case? Or do you look say for stabilization ?
I understand the 50 and the Rsi overall basis but struggle to identify when its classically oversold/underbought.
So oversold be anything above 90.
Any help be appreciative. This is an area I'd like to know in and outs more of it. Understanding the complexities of RSI
Appreciate this
OptionsRising
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@Legalizedhustler, Many traders have left RSI for newer indicators, yet my experience is that this is still tremendously useful and reliable. Yes there are different ways to use RSI. This article helps to get you started, and you look up others. tradingsim.com/blog/relative-strength-index/ From experience I will say that a 7-period RSI is more useful in day trading and strong trends. The linked article is one of the few that discusses the 33.33 and 66.66 proposed by J. Hayden, but I have seen it work and used it in my trading (only on 14 period RSI). Other ways that I use RSI as my primary indicator:
* dip below 50 and move up (with a higher trade) = bullish
* rise over 50 and back down (with a lower trade) = bearish
* divergence between RSI and prices - powerful signal giving great trades
* RSI holding 34-35 and moving up = bullish trend will resume
* RSI resisting 60-65 and moving lower = bearish trend will resume
RSI-based decisions also depend on the larger trend, and (of course) signals should not be taken as definitive predictors.
ThinkLikeaWhaleTLAW
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@OptionsRising,
Man... Sone nuggets of info here.. Thanks so much.
I appreciate your input and knowledge for the community.
I try not to change to much of what I'm already doing. Sometimes To Much info dilutes your original path so I slowly take in New ideas to improve on existing and RSI is one in basis I understand kind of. But always alluded me to how it truly functions. Forever grateful
Much love
#poorfromtheoutside
Legalizedhustler
TheJoeG
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Yeah ADX showing the same thing, was below both bull and bear signals, means it in a lull, but coiling for a strong move
So above 50 signifies a price move? Is this generally always the case? Or do you look say for stabilization ?
I understand the 50 and the Rsi overall basis but struggle to identify when its classically oversold/underbought.
So oversold be anything above 90.
Any help be appreciative. This is an area I'd like to know in and outs more of it. Understanding the complexities of RSI
Appreciate this