The NASDAQ has had quite the run up since March and many investors are looking for the opportunity to buy. This most recent pullback at first appears to be a buying opportunity however, the RSI is flashing warning signals. Patience will pay off.
Warning Signal: This RSI divergence on the daily chart indicates the strength of this bullish trend has been weakening. Historically this has led to a deeper correction or at the very least, indecisive chop.
When is the most strategic time to buy according to history? If we extend the trend line and look closely it is clear that the optimal time to buy is when these 2 criteria are met. 1. RSI break out 2. Price is above 50 Day EMA