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RSI Indicator Chart Patterns and Trend Lines

Traders can plot trend lines on the RSI in the same way as you can plot trend lines on the price charts. RSI trend lines are plotted the same way trend-lines are plotted on the chart; by joining consecutive highs of the Indicator or consecutive lows on the Indicator.

RSI Indicator Chart Patterns and Trend Lines

RSI and Trend Lines

 

 

RSI Chart Patterns

Chart patterns such as head and shoulders or triangle chart patterns that are not evident on the price chart are often formed on this indicator.

 

RSI indicator also often forms chart patterns such as head and shoulders or triangles patterns that may or may not be visible on the price chart. As shown on the chart below the Reverse Head and Shoulders reversal formation is clearly shown on this indicator.

RSI Chart Patterns

Chart Patterns on RSI

 

Support and Resistance Levels

Sometimes levels of support and resistance are demonstrated better on the RSI than on the price chart.

 

In an uptrend the support levels should not be broken at any one time, if they are broken then price will also break the support levels and the upward trend is going to reverse.

 

In a downtrend the resistance levels should not be broken, if they are broken then price will also break the resistance levels, and the downward is going to reverse.

RSI Support and Resistance Levels

Support and Resistance Levels


In the example above when the third resistance level was broken the downtrend reversed to an upward trend and when the sixth support was broken the uptrend reversed and broke the upward trend line.