📊 Capital Market Chronicles – Episode 313: TECHNICAL ANALYSIS – RELATIVE STRENGTH INDEX (Part III)
Now we’re getting to the good stuff 😄📊
This is where RSI stops being “just a line”…
and starts becoming a decision-making tool.
🔥 Overbought – “Too Much Excitement!”
When RSI goes above 70:
👉 Market may be overbought
Meaning:
- Too many buyers
- Price may correct
😄 Market Reality
Everyone:
“Buy! Buy! It’s going up!” 🚀
RSI:
“This party might end soon…” 😏
❄️ Oversold – “Too Much Panic!”
When RSI drops below 30:
👉 Market may be oversold
Meaning:
- Excessive selling
- Possible rebound
😄 Market Reality
Everyone:
“Sell! It’s crashing!” 😨
RSI:
“Relax… it might bounce 😄”
🔄 Divergence – The Hidden Signal 👀
This is where RSI becomes next level.
🟢 Bullish Divergence
- Price makes lower low
- RSI makes higher low
👉 Selling pressure is weakening
🔴 Bearish Divergence
- Price makes a higher high
- RSI makes a lower high
👉 Buying momentum is fading
😄 Simple Analogy
Price:
“I’m strong!” 💪
RSI:
“Are you though…?” 😏
🎯 Why This Matters
Divergence helps you:
- Spot reversals early 🔄
- Avoid late entries 😬
🔚 What’s Next?
Ready to level up? 🎮
Next episode:
- RSI Bands
- RSI %B
- Failure Swings
Welcome to advanced RSI mode 😎
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