RSI Indicator Stock Index Patterns and Stock Indices Trend Lines
Traders can draw trend lines on the RSI in the same way as you can draw trend lines on the price charts. RSI stock trend lines are drawn the same way stock trend lines are drawn on the chart; by joining consecutive highs of the RSI indicator or consecutive lows on the RSI stock Indicator.
RSI Stock Indices Trend Lines & Stock Indices Trend lines on Charts
RSI Chart Patterns in Stock Indices
RSI Chart patterns such as head and shoulders stock indices setups or triangle chart patterns that are not evident on the price chart are often formed on this RSI stock index trading indicator.
RSI indicator also often forms stock patterns such as head & shoulders or triangles stock chart 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 stock indices RSI indicator.
Chart Pattern Setups on RSI Chart Technical Indicator
Support and Resistance Levels Trading using RSI Indicator
Sometimes stock chart levels of support and resistance levels are demonstrated better on the RSI indicator than on the price chart.
In an upward stock market trend the support levels should not be broken at any one time, if they are broken then stock index price will also break the support levels & the upward trend is going to reverse.
In a downward stock trend the resistance levels should not be broken, if they are broken then stock index price will also break the resistance levels, and the downward stock trend is going to reverse.
Support and Resistance Areas on RSI Technical Indicator
In the stock example above when the third resistance level was broken the downward stock trend reversed to an upward stock trend and when the sixth support was broken the upward stock market trend reversed and broke the upward trend line.