RSI Divergence

What is RSI?

RSI (Relative Strength Index) is a momentum indicator that ranges from 0 to 100:

Above 70 → Overbought
Below 30 → Oversold

It helps you understand strength of price movement.

🔹 What is RSI Divergence?

Divergence happens when:
👉 Price moves in one direction
👉 But RSI moves in the opposite direction

This signals that the current trend may be weakening.

🔹 Types of RSI Divergence
📉 1. Bearish Divergence (Sell Signal)
Price: Higher Highs
RSI: Lower Highs

👉 Meaning: Uptrend is losing strength → Possible reversal down

Example:
If NIFTY 50 is making new highs but RSI is falling → caution for downside

📈 2. Bullish Divergence (Buy Signal)
Price: Lower Lows
RSI: Higher Lows

👉 Meaning: Downtrend is weakening → Possible reversal up

Example:
If Infosys is falling but RSI starts rising → buying opportunity