In this chart I have plotted two channels which I have drawn using the Relative Strength Index
) and not Price. Between these two channels, the blue one is more relevant as it's upper border has proved itself as a source of supply. The other red one is a flat channel which faced a clean breakout failure when the index tried to break above the 11,700-11,800 range. Now with the recent one-way sell-off in the market, an obvious question arises - how far can this correction extend? Well as per these two channels, 10,800 is the first level of support from the blue channel. Further damage can be really painful for the investor community, for whom the next level to watch for is at the psychological 10k mark.
Drawing channels using the RSI
is a very useful technique to figure out important levels. This technique is part of my mentorship program, details of which you can check here - https://mentorshiptraders.com/