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Key Point to Identify the direction of RSI Indicators

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Key Point to Identify the direction of RSI Indicators

In the previous blog we discussed about the RSI Intraday Strategy | Best Indicator for Intraday and proceeding further today we will discuss about some key indicators that will provide you information on the RSI indicator if they are taking support or resistance or if they will breakout.

These indicators can help you to increase the chances of booking big profits. Starting with the Gap-Up and Gap-Down theory, we will further discuss the specifications that define the  “Breakout & Breakdown” with “ Reversal”.


GAP-UP & GAP-DOWN THEORY

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Gap-Up

  • A Gap Up forms when the opening price for the day is higher than the previous day’s closing price.
  • For example, if the previous day’s high was 100, and the stock opened at 105, there would have been a 5-point gap up. This is considered a bullish signal.
  • So, if there is a Gap-Up in the price, wait for a Pull-Back and BUY at any EMA or any strong support which will cause the stock to bounce back up and your Risk-reward ratio will be higher.
  • If there is a Gap-Up and the price keeps going higher and doesn’t take a Pull-Back, ignore that stock and DO NOT TRADE ON THAT STOCK FOR THAT DAY.

Gap-Down

  • A Gap-Down form when the opening price for the day is lower than the previous day’s closing price.
  • For example, if the previous day’s high was 100, and the stock opened at 95, there is a 5-point Gap-Down. This is considered a bearish signal.
  • So, if there is a Gap-Down in the price, wait for a Pull-Back and SHORT at any EMA or any strong resistance which will cause the stock to rally back down and your Risk-reward ratio will be higher.
  • If there is a Gap-Down and the price keeps going down and doesn’t take a Pull-Back, ignore that stock and DO NOT TRADE ON THAT STOCK FOR THAT DAY.

BREAKOUT, BREAKDOWN & REVERSAL

Breakout and Breakdown

Reversal

RSI giving a breakoutRSI took support or resistance
ADX RisingADX Rising
No crossover on MACDReverse crossover on MACD
EMA levels breakoutEMA levels act as Supp or Resist.
Trend lines breakingTrend lines act as Supp or Resist.

Booming Bulls Academy

These were some of the key indicators that will provide you information on the RSI indicator. Keeping these indicators in mind, no one can face difficulty on recognising the Breakout or Breakdown point or the Reversal point by the RSI Indicators.

Hope you enjoyed learning the Key Indicators which can help in recognizing the Support or Resistance of RSI Indicators.

Check out our new video on  Intraday Trading Setup by Anish Singh Thakur | Trading Nifty | BankNifty Options | Best Trade Setup on Youtube.

Also check out our video on KNOW ABOUT THE STOCK MARKET FROM BASIC TO ADVANCED

If you are new to trading and want to learn about stock market from scratch please check our video on “BASICS OF STOCK MARKET” here.

3 Comments

  1. you work is very and helped to bost motivartion , i have empty my fund but still learning and makeing money

  2. Good morning team booming bulls.
    I have a doubt plz clear it.

    1- For Gap up example- opening price for today is high for previous day last candle high or previous day high.

    2-For Gap Down example- opening price for today is low for previou day last candle low or previou day low.

    Plz resolve my doubt.
    ThanKing all of you.

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