Spotting A Crash With RSI and MACD in five steps
Following are common things one can spot on weekly chart which happen before fall/crash of 2008 and 2020, similar thing can be found in other indices and on all time frames in chart
1. Price will continue to make higher high RSI or MACD indicators will show trend exhaustion with lower high not breaking previous high
2. Series of Negative divergence is seen on chart, look for 3 or more (RSI is leading indicator will produce more divergences compared to MACD)
3. Look for Head and Shoulders or Rising wedge or double top pattern on chart at top of trend
4. Finally Divergence line is broken out upside signaling final move started, that's exit signal 1.
5. Rsi will break line again downside and MACD crosses below signal line, that's exit signal 2.
DISCLAIMER:There is no guarantee of profits nor exceptions from losses.
Technical analysis provided on the chart is solely the personal views of my research.
You are advised to rely on your own judgments while taking any investing/Trading decisions.
Past performance is not an indicator of future returns. Investment/trading is subject to market risks.
Seek help of your financial advisors before investing/trading.
Not recommended to take FnO positions based on this analysis
1. Price will continue to make higher high RSI or MACD indicators will show trend exhaustion with lower high not breaking previous high
2. Series of Negative divergence is seen on chart, look for 3 or more (RSI is leading indicator will produce more divergences compared to MACD)
3. Look for Head and Shoulders or Rising wedge or double top pattern on chart at top of trend
4. Finally Divergence line is broken out upside signaling final move started, that's exit signal 1.
5. Rsi will break line again downside and MACD crosses below signal line, that's exit signal 2.
DISCLAIMER:There is no guarantee of profits nor exceptions from losses.
Technical analysis provided on the chart is solely the personal views of my research.
You are advised to rely on your own judgments while taking any investing/Trading decisions.
Past performance is not an indicator of future returns. Investment/trading is subject to market risks.
Seek help of your financial advisors before investing/trading.
Not recommended to take FnO positions based on this analysis
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