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Introducing the Dynamic Fusion OscillatorHello, it's Stock Justice here! In our latest video, we delve into the world of the Dynamic Fusion Oscillator (DFO) - a tool that blends the power of the Relative Strength Index and the Stochastic Oscillator. I walk you through how it works, from understanding these two base components to how we fuse them to create a balanced and sensitive tool for identifying market trends and reversals. We dive deep into how the DFO uses moving averages to signal potential bullish or bearish trends, and how divergence within the DFO can indicate trend reversals or continuations. I also touch on the DFO's capacity for multi-timeframe analysis, giving you the bigger picture of market trends. Wrapping up, I remind you of the DFO's value as a versatile trading tool, but also emphasize the importance of using it alongside proper risk management and other technical analysis components. All in all, this video is a must-watch for traders aiming to enrich their toolkit and navigate the market more effectively!
NASDAQ:NVDAEducation
by StockJustice
Apple Inc.'s Stock Breakout and Future PossibilitiesApple Inc. (AAPL) has been a major player in the technology industry for decades. With its innovative products and constant growth, it has consistently attracted investors looking to gain from its success. In this update, I'll dive into the recent breakout of Apple's stock from its previous channel, the potential for further growth, and the need for caution in the face of overbought indicators. The Inverted Head and Shoulders Breakout In a previous update, I discussed the possibility of Apple's stock breaking out of the channel it had been trapped in for over a year. The inverted head and shoulders pattern that emerged broke out at $156, initially targeting $168 with a stretch target of $172 to $179. Against many expectations, AAPL has continued its upward trajectory, reaching a high of $174, marking a considerable increase from its bottom of $124 in June of the previous year. Wave Structure and Potential Targets From a wave structure perspective, it appears that we are currently witnessing the completion of a larger corrective move. However, identifying a clear 5-wave impulse from the lows proves challenging due to the corrective chop that occurred right in the middle of the inverted head and shoulders pattern. A possible target, based on this analysis, is $177, which is already within close range. Caution Advised in the Face of Overbought Indicators While the recent performance of AAPL has been nothing short of impressive, it is essential to exercise caution as numerous indicators on higher timeframes are pointing towards overbought conditions. Apple's stock has skyrocketed since hitting its bottom last June, which could be a cause for concern. As we move into the next week, it is advisable to remain cautious, as there is a possibility of a more significant pullback in equities in the coming weeks. Investors should closely monitor market conditions, technical indicators, and any new developments that may affect Apple's stock performance.
NASDAQ:AAPLShort
by bitdoctor
Tips to Help Demystify the RSIPrimary Chart: Tips to Help Demystify the RSI Introduction to Momentum Indicators Many indicators exist for technical analysis. And a number of them focus on momentum, which is distinguishable from other core technical concepts such as trend, support and resistance, volatility, and standard deviation. Momentum tools measure the velocity of a directional price move. Using a train as an analogy, momentum considers the speed, velocity and magnitude of the train's movement in a given direction, e.g., north or south. In a sense, it helps determine the strength and speed of the directional travel of the train. By contrast, trend analysis considers whether a price move is consistently heading in a given direction. A trend can be valid despite corrective retracements, where price retraces a portion of the prior move, consolidates a portion of the prior move, and then resumes movement in the trend's direction. Using the same train analogy, trend analysis considers how effectively and persistently the train is moving in a given direction, such as north or south. Momentum, though, considers the train's speed and velocity in whatever direction the train is moving. Many momentum indicators also are not limited to analyzing momentum and may have utility as a trend gauge as well. For example, Stochastics, MACD and RSI all have the additional capacity to help analyze trends. Basic Concepts and Calculation of RSI Created by J. Welles Wilder, the RSI is one of the most widely used and well-known momentum indicators. The acronym "RSI" means relative strength index. RSI should not be confused with the concept of relative strength, which compares one instrument or security against another to determine its outperformance or underperformance. Some other common momentum indicators that have been in use for many years include the Rate-of Change, Chande Momentum Oscillator, Stochastics, MACD, and CCI. Most momentum indicators, including RSI, share some conceptual aspects, such as overbought and oversold conditions and divergences, even though they may vary in the way they are calculated and interpreted. Reviewing the way an indicator is calculated can sometimes help to sharpen one's understanding of it and interpret it more effectively. RSI's calculation is not as complex as some indicators. So reviewing its calculation remains an accessible exercise, but this is not essential to mastering the indicator. TradingView's RSI description contains a useful summary of how the indicator is calculated. See the Calculation section of the RSI description at this link: www.tradingview.com(close%2C%2014). Another excellent description of how RSI is calculated may be found on this reputable technical-analysis website: school.stockcharts.com To summarize, RSI's basic formula is as follows: RSI = 100 – (100 / 1 + RS), where RS = average gain / average loss. Using the default lookback period of 14 (note that any lookback period can be selected), the calculation then proceeds to include 14 periods of data in the RS portion of the calculation (average gain / average loss). So the average gain over the past 14 periods is divided by the average loss over the past 14 periods to derive "RS," and then this RS value is plugged into the formula at the start of this paragraph. The subsequent calculations also have a lookback of 14 periods (using the default settings) but smooth the results. Smoothing of these values then occurs by (1) multiplying the previous average gain by 13 and adding the current period's gain, if any, and dividing that sum by 14, and (2) multiplying the previous average loss by 13 and adding the current period's loss, if any, and dividing that sum by 14. If the lookback period is adjusted from the default of 14, then the formula and smoothing techniques will have to adjust for that different period. In short, the calculation reveals that RSI's core function is to compare the size of recent gains against the size of recent losses and then normalize that result so the indicator's values may fluctuate between 0 to 100. Note that if a daily period is used, for example, the average day's gain is compared against the average day's loss over the lookback period selected. Similarly, if hours are used, the average hour's gain is compared against the average hour's loss over the relevant lookback period. RSI can be used on any timeframe, including a 1-minute or 5-minute chart, and simply calculates its values based on the period to which the indicator is applied, based on a default using closing prices for the period specified. With TradingView's RSI indicator, traders have a great deal of flexibility in adjusting such defaults to some other preferred value, so the closing price need not be used—the default can be changed to the open, the high, the low, high+low/2, high+low+close/3, or several other options. Interpreting RSI's Overbought and Oversold Signals With some exceptions, the higher-probability RSI overbought (OB) and oversold (OS) signals align with the direction of the trend. The old trading adage remains valid for RSI as with other forms of technical analysis: the trend is your friend. In the chart below, consider the yellow circles flagging OS signals that could have been effective in the Nasdaq 100's uptrend in 2021. Supplementary Chart A: Example of RSI OS Conditions That Align with an Uptrend and Key Support As with other technical trade signals, countertrend setups should be avoided in the absence of overwhelming confirmation from other technical evidence. If a countertrend setup is traded, use extra caution and smaller position size. In this context, trading RSI signals against the trend means selling or entering a short or bearish position in an uptrend when an OB signal appears, or it means buying or entering bullish positions in a downtrend when an OS signal appears. It may also mean trading counter-trend positions as soon as RSI begins exiting an OB or OS zone. Stated differently, trading overbought and oversold signals against the trend will likely result in mounting losses. Countertrend trades require much technical experience and significant trading expertise—and even the most experienced trading veterans and technical experts say that the counter-trend trades tend to be low probability setups. In short, never trade the RSI's OB and OS signals mechanically without considering any other technical evidence. Supplementary Chart B: NDX OB Condition in an Uptrend In the chart above, note how the Nasdaq 100 (NDX) reached a fairly high daily RSI reading of 77.17 on July 7, 2021. This chart shows an example of how even very high OB conditions can persist much longer than expected. RSI remained above 70 for over a trading week. And the ensuing pullback was not that significant, and it didn't reverse the uptrend at all. The risk-reward for mechanically trading this setup would have been poor, and stops would probably have been ignored at some point in the days following the signal. For an experienced trader with small position size, perhaps the second RSI peak immediately following the July 7, 2021 peak would have worked for a short-term trade given that a divergence arose (higher price high coinciding with a lower RSI high). But it would still have been a difficult trade requiring excellent timing and precision. In summary, OB / OS signals should not be interpreted and traded mechanically. The trend and other technical evidence should always be considered. OB / OS signals work best when aligned with the direction of the trend on the relevant time frame. They also work best when taken at crucial support or resistance. Consider several other tips and tricks when interpreting OB / OS signals on RSI. 1. The importance of an OB / OS signal depends not only on the context of the trend in which it arises but also on the time frame on which it appears and the lookback period used in its calculation. This is intuitive, but it helps to keep this in mind. For example, an OB / OS reading has a greater effect on the weekly or monthly chart than on the daily, and an OB / OS reading has a greater effect on daily chart than on the hourly or other intraday chart. Furthermore, if the RSI lookback period is set to 5 periods on a given time frame, the effect of an OB / OS reading will less significant than if the RSI lookback period is set to 14 (the default setting). 2. Consider past OB / OS readings for the same security or index being considered (using the same time frame for past and current OB / OS readings). Each security or index may have OB / OS levels that differ somewhat from other securities or indices. In addition, the OB / OS readings that are typical for a given a security, index or instrument may vary over time in different market environments. It may help to draw support or resistance lines on the RSI indicator within the same market environment and trend to determine what RSI OB / OS levels are typical. RSI support or resistance levels in an uptrend should not drawn to be applied and used in a downtrend for the same index or security. Supplementary Chart C.1: RSI Support and Resistance Levels for NDX in 2021 on Daily Chart Supplementary Chart C.2: Two RSI Downward Trendlines Drawn on BTC's Weekly Chart to Help Identify Resistance 3. Divergences can strengthen the effect of an OB / OS signal. Stated simply, a divergence occurs when the RSI and price are in conflict. For example, consider two or three subsequent higher highs in price that occur (this can happen in an uptrend or a bear rally or in a trading range). When price makes the second or third high, a divergence arises if RSI makes a lower high. Or consider two or three subsequent lower lows in price. When price makes the second or third lower low, a divergence arises if the RSI makes a higher low. A greater number of divergences presents a stronger signal than a lower number of divergences. And having divergences on multiple time frames can also be helpful. Finally, a divergence should not be traded until confirmation comes from price itself, i.e., a trendline or other support / resistance violation. Supplementary Chart D: Example of RSI Bearish or Negative Divergence at NDX's All-Time High in November 2021 4. OB / OS signals also can be helpful in chop when they arise at the upper boundary of a well-defined trading range. In choppy trading ranges, one has a better trading edge at the edge. OB / OS signals that arise at the edge (at critical support / resistance) are the most useful. But depending on the trading strategy, setups in choppy trading ranges can be more difficult and lower probability than setups in strong trends. Using RSI as a Trend-Analysis Tool While primarily a momentum tool, the RSI has trend-analysis aspects. Because the RSI will likely remain in overbought (OB) or oversold (OS) for extended periods, it helps evaluate the strength and duration of price trends. In an uptrend or bull market, the RSI (daily) tends to remain in the 40 to 90 range with the 35-50 zone acting as support. In a downtrend or bear market the RSI (daily) tends to stay between the 10 to 60 range with the 50-65 zone acting as resistance. These ranges will vary depending on the RSI settings, time frame, and the strength of the security or market’s underlying trend. As mentioned above, RSI readings will also vary from one security or index to another. They also vary in different market environments, e.g., a strong uptrend vs. a weak uptrend will have different OB / OS readings. So the RSI can help confirm the trend when it moves within the RSI range that is typical of that security or index when trending. As a hypothetical example example, if a major index appears to be making higher highs and lower highs, respecting trendline and other key supports, and showing technical evidence of an uptrend, then RSI can help confirm this trend analysis by marking OS lows within the 35-50 range (perhaps 30 on a volatile pullback). RSI can also help time entries and exits when reaching the area that has been where RSI has found support in its current market environment. The following points summarize how RSI tends to operate during trending price action: During an uptrend, RSI will trend within the upper half of the range (roughly), moving into OB territory frequently (and at times persisting in the OB zone) and finding support around 35-50. When RSI finds support around 35-50, this may represent tradeable a price pullback—a retracement of the recent trend’s price move—that may work as a bullish entry if other technical evidence confirms. During a downtrend, RSI will trend within the lower half of the range (roughly), moving into OS territory frequently (and at times persisting in the OS zone) and finding resistance around 50-65. When RSI finds resistance around 50-65 (sometimes higher given the violent nature of short-squeeze induced bear rallies), this may represent tradeable a price bounce—a retracement of the recent trend’s price move —that may work as a bearish entry if other technical evidence confirms. RSI, like other indicators, cannot produce perfectly reliable and consistently accurate signals. Like other indicators, it can help identify higher probability trade setups when used correctly and when confirmed with other technical evidence. When considering trade setups in terms of probabilities rather than certainties, traders will find position sizing and risk management to be a vital part of any strategy that relies in part on the RSI.
KRAKEN:BTCUSDEducation
by SquishTrade
51
BTCUSD Ready to exit this big diamondBTCUSD reached further the supply area in overbought condition. A potential decrease of 7% can occur if the price action interact with the anchored VWAP from ATH. This potential movement can ignite an impulsive 5-wave bearish exiting of this big diamond pattern, which is likely complete. Fisher Transform suggests the direction of the price action in 2H and 1D timeframes. Overbought condition on macro scenario, in which the price seems to be form a top, ready to a swing downward to complete a 5th wave of a expanded ending diagonal, likely to finish the actual bearmarket.
BITSTAMP:BTCUSDShort
by firmestudio
EURUSD : Support & Resistance Trading strategyOANDA:EURUSD Eurusd , Is trading in channel up , After immense bearish downtrend last week market recover 100% , As market is overbought now Possible market after hitting resistance at 1.0777 will retrace to lower trendline for more bullish momentum Our target from 1.0777 will be 1.0709 area if price break down lower trendline than fair chances that we may see 1.0657 mark ❤️ Please, support my work with follow ,share and like, thank you! ❤️
Short
by INVESTRONE
INJSDT: Facing Resistance, Overbought, Retracement PotentialInjective Protocol (INJSDT) has recently experienced an impressive rally that saw the price surge from a significant support level around $2.50 to a crucial resistance level at $4.65. As the market now seems to be in a range, various indicators are signaling overbought conditions, raising questions about the next possible move for INJSDT. Current Market Situation At the time of writing, INJSDT's price has stalled around the $4.65 resistance level. This level has proven to be a barrier for the asset in previous instances, making it an essential price point to watch. The support level at $2.50 played a significant role in the recent bounce, and this level is worth noting as a potential target in case of a retracement. Overbought Indicators One of the critical factors in the current market situation is the overbought condition of various technical indicators. These overbought indicators suggest that the market might be due for a correction in the short term. In such a scenario, the price may either consolidate at the current level, allowing indicators to reset, or it could undergo a retracement to lower support levels. Wave Master Indicator on the 4h Timeframe The Wave Master Indicator on the 4-hour timeframe has been a reliable tool for gauging price trends and identifying potential market reversals. As of now, the indicator is beginning to curl down after the recent thrust upwards, indicating that the bullish momentum may be losing steam. Potential Scenarios Consolidation: If INJSDT's price consolidates around the current level for a few days, it could allow the overbought indicators to reset, paving the way for a renewed push towards higher resistance levels. In this scenario, the price could potentially reach the $5.35 to $7.50 range. Retracement: Should the market fail to consolidate and the overbought conditions persist, INJSDT might experience a retracement back to lower support levels. The price could drop to around $3.00 before resuming its upward trajectory. This would still set the stage for a possible move to the higher resistance levels between $5.35 and $7.50. The consolidation or retracement scenarios will depend on whether the market can stabilize and reset the overbought conditions or whether a deeper correction is necessary. As always, exercise caution and utilize proper risk management techniques in your decision-making process.
by bitdoctor
NVDA- Overbought & Over-ExtendedBeen eyeing NVDA for quite some time now after playing the breakout from the inverse head and shoulder's it had been holding. However, with broader market conditions being what and where they are, looking for a bit of a retrace here on NVDA prior to its earnings. Overbought on almost every timeframe, MACD Death Cross, bearish divergence on the RSI, as well as a bearish ABCD Elliot wave on the daily timeframe and a massive bearish harmonic pattern on the weekly timeframe along with a double top on the 4-hour timeframe (See Attached Charts Below). NVDA is simultaneously rejecting a major RSI-based demand level, which is exactly where the .78 FIB level lies. Watching closely here- some FIB levels and RSI-Based supply and demand zones to keep an eye on in the meantime- Bearish short-term, Bullish long --Weekly Timeframe-- --4-Hour Timeframe--
NASDAQ:NVDAShort
by jacobosiason7
2
Educational (divergence + volume)Hi guys, in order to spot a divergence you should be careful which timeframe you're looking at. for example in the left picture, the daily timeframe is showing higher highs in price (at each candle) and lower highs in RSI (at each candle). but note that these are not highs and lows and as long as you can't find signs of accumulation and distribution in highs and lows (as long as there's no valid consolidation) you can't name them as highs and lows. so there's no divergence. but in the lower time frame (what is shown is 4h) you can see it more clearer that for every candle in the daily time frame, you have a specific trend in the 4H timeframe. so you can name them as highs and lows and yes, there is a divergence now. also, keep in mind that in the lower timeframe. every time you're making a new high in rsi, you should expect it to be more volatile and be more sensitive in a way that in the next new rsi high, you have less time spent in the overbought area. The next part is about the volume profile. you have less resistance in front of the price movement where there is less volume traded in the past. BUT NOT ALWAYS! less trades made in the past in an area means two things: 1- you can expect the price to move faster and sharper and take less time in that area 2- if the price wants to make a low or high or a pattern, it's less predictable and there's more chance of wrong analysis and fake patterns. Feel free to leave any comments and ask questions!
Education
by Finnovin
we are right at that same level in spx futes4037 is former r1 swing in wave, and bulls are in full control of that momentum with the breakout. there are two paths we could take. if bulls maintain that control of the 4037 level we will reac r1 soon, but back to swing p sooner if we lose it. scenario a coincides with extension, and scenario b is a continuation of b wave. im favoring the downside, but im not dedicated to that idea. specifically if we take out the highs of this futures session im adding, and if we resist from 4037 im continuing to sell. tsla, aapl and the like are great both ways.
CME_MINI:ES1!Short
by cerealpatterns
ETHUSD - Overbought - Bearish DivergenceOn the 4h-timeframe (left chart) chart of Ethereum (ETHUSD) we can see bearish regular divergence has appeared. Divergence is a strong indication that the price will move in the opposite direction. This chart is showing that it is likely for the price to drop. On the 1d-timeframe (right chart) of Ethereum (ETHUSD) we can see an overbought condition. The three indicators are all suggesting this condition and it is likely for the price to drop. The three indicators used are the Bollinger Bands, RSI, and the Stochastics. There are two indications on different timeframes and are complementary to each other and suggest that the price will drop. All further details are shown on the charts. Good luck!
BITSTAMP:ETHUSDShort
by vf_investment
11
Bitcoin(BTCUSD) - Overbought - DecreaseOn the chart of Bitcoin (BTCUSD) we can see an overbought condition on a daily timeframe. The three indicators used are the Bollinger Bands, Relative Strength Index and the Stochastics. All three indicators are indicating an overbought condition. The price is currently bouncing off a resistance strong resistance. In combination with the information from the indicators, it is likely for the price to decrease within the range until it finds support. See all further details on the chart. Good luck!
BITSTAMP:BTCUSDShort
by vf_investment
11
BITCOIN Will Have a Correction Before Going Back BullishHello Bitcoin traders, Bitcoin has been very bullish for the past two days, but always be ready for a correction because many signals show that it is still overbought (see my previous post for 4 signals). With the Fibonacci Retracement, we see many moments where the principal lines served as support or resistance for the price. The price has now reached the "Golden Pocket" where reversals often happen. We can expect the price to have a slight to medium correction before continuing its bullish rally.
BITSTAMP:BTCUSD
by YanakTrading
2
QNTUSDT - Short - Broadening WedgeQNT is currently forming an ascending broadening wedge pattern on daily timeframe. An ascending broadening wedge is a bearish reversal chart pattern. Where the upper line is the resistance line and the lower line is the support line. As we can see in the chart that it´s moves increase with higher magnitudes. This pattern should be traded when the price breaks out of the support line. Looking at the pattern combined with the three indicators we can conclude it´s currently in an overbought condition. So it´s likely for the price to retrace. The three indicators are Bollinger Bands, RSI 14 and Stochastic. In our opinion it´s more likely for the price to retrace and pump once more before it breaks out of the support line. So for now Target 1 in prioritized. Before targeting the other two targets we have to wait what happens after Target 1! All the details are shown on the chart. Goodluck!
Short
by vf_investment
9
4 signals shows that BITCOIN is overbought.In this chart we see many signals that indicates that Bitcoin is overbought and that the price will soon be corrected and go back down. - A trendline connected 3 corrections, but then the price rallied, thinking it doesn't has to come back to the trendline, meaning it is too bullish and is overbought. - Candlesticks broke above the Bollinger Bands (BB), meaning there is an upcoming reversal. - RSI is above 70 (=overbought) - Bollinger Bands %B is above 1 (=overbought) Using the TBS Strategy, consider selling when the BB %B crosses down.
BITSTAMP:BTCUSD
by YanakTrading
1
BITCOIN IS OVERBOUGHT! RSI shows the price will go back downTo everyone that is overly exited with Bitcoin right now... Calm down! Yes Bitcoin has rallied quite a bit for the past day, but don't jump on it too quickly because it is extremely overbought. As shown on the RSI, the price is largely above the 70 mark, meaning that people are buying excessively and that the price will soon come back down. If you gained from the bullish movement, think about selling soon and buying again when the price will come back down because it certainly will according to the RSI.
BITSTAMP:BTCUSD
by YanakTrading
1