RSI Divergence Explained Simply and Understandably. // Trading Strategy Indicator Bullish Bearish


RSI Divergence Explained Simply and Understandably. // Trading Strategy Indicator Bullish Bearish alert scalping screener scan MACD stochastic stochastics index moving averages day swing example examples basics david moadel welcome to looking at the markets with
David Modell today I wanted to give an introduction to RSI divergences so let’s
talk about that a bearish divergence means that the price action or
candlesticks show higher highs but the RSI shows lower highs and that might be
a time to be cautious a bullish divergence means that the price action
or candlesticks show lower highs but the RSI shows higher highs so the true
direction might be found in the RSI and this does not work 100% of the time you
know I don’t want you to count on any indicator completely you need to do your
own research and make your own decisions but this is something you can use to
help you alright so first I’m going to show you some bearish divergences so
this is Alta stock and all these charts are from stockcharts.com and we see here
in May and early June we see higher highs in the candlesticks or the price
action but at the same time we see lower highs in the RSI and as we can see in
this case the RSI really was correct because afterwards the price went down
considerably here’s another bearish divergence from
Tesla stock and here in June we see higher highs in the candlesticks or
price action but at the same time we see lower highs in the RSI and again at
least in the short to medium term we see that we see that the RSI was correct
because the stock went down sharply afterwards
here’s Lowe’s stock and again we see higher highs and and these are all daily
charts by the way daily candlestick charts we see higher highs in the
candlesticks but at the same time lower highs in the RSI and we can see what
happened afterwards the stock went down so the RSI was correct in this case it’s
not correct every time but this is something to be aware of and here’s
Consolidated Edison and again higher highs in the stock price action but
lower highs at the same time in the RSI all right Andy stock in the short-term
did go down afterwards all right so these are bearish divergence is I wanted
to show at least one bullish divergence and this is from silver miners sial
and we see here in March the price action we have lower highs but at the
same time higher highs in the RSI and the stock did go up afterwards alright
so I just wanted to show an example of a bullish divergence alright so that was
my brief introduction to bullish divergences and bearish divergences
between the RSI and the candlesticks or price action it does not work every time
but sometimes oftentimes I would say the RSI tells the true story but you want to
use other indicators and at the end of the day you want to make your own
decisions not based just on one or two indicators you have to make your own
research and decisions I hope this was helpful to you though so if you like
this video please give it a thumbs up on YouTube leave comments and please
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address is David Modell at gmail.com thank you so much for watching and
listening and I’ll talk to you again soon thank you for watching please like
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