1. RSI rotates in a BAND between 0 and 100, RSI can neither go below 0 nor above 100,
2. When the RSI goes above 70, it tells us about OVERBOUGHT and shows the top of STRONG POSITIVE MOMENTUM in stock, from which it is likely to be CORRECTION or the market is down.
And it may happen that when the CORRECTION comes, the price will come down and in such a situation some traders may think of SHORT SELLING or SQUARE OFF their position,
3. When the RSI goes below 30, it tells us about OVERSOLD, and shows the top of STRONG NEGATIVE MOMENTUM in stock, beyond which the possibility of CORRECTION or above the market can be done,
In such situations, some traders may look for an opportunity to buy, and try to make their position long,
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2. When the RSI goes above 70, it tells us about OVERBOUGHT and shows the top of STRONG POSITIVE MOMENTUM in stock, from which it is likely to be CORRECTION or the market is down.
And it may happen that when the CORRECTION comes, the price will come down and in such a situation some traders may think of SHORT SELLING or SQUARE OFF their position,
3. When the RSI goes below 30, it tells us about OVERSOLD, and shows the top of STRONG NEGATIVE MOMENTUM in stock, beyond which the possibility of CORRECTION or above the market can be done,
In such situations, some traders may look for an opportunity to buy, and try to make their position long,
Read More
