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Bharatjhunjhunwala

RSI Divergence(s) :: A Case Study 📈📉Hey Pivster's ★ Found out one interesting query in a public forum and thought to provide the explanation through a chart so that it can be documented for reference in future. Chart is actually self-explanatory as marked and constructed accordingly 🫶 ◉ Query: "During uptrends prices make lower highs whereas RSI makes lower lows..this is called positive reversal". This is a statement made by Bharat Jhunjhunwala in one of his lectures....i don't get the lower highs in prices...can anyone explain? ☞ My answer would be - ➣ He is basically taking about a RSI positive divergence scenario where the “Price” has higher probability for making a reversal. ➣ This scenario is ideal as 'RSI' is mostly taking closing price into consideration. SO, when the price starts to close above the previous red candles it shifts the RSI curve towards an uptrend and a reversal can be confirmed once the 'Price' breaks the previous Lower High (LH) which will eventually be in correspondence to the 'RSI' making a Higher Low (HL) after a visible "Positive Divergence" to the 'Price' chart. ➣ Here, the structure for the 'Price' is now expected to reverse and follow the structure of an "Uptrend" now while the "RSI" continues making Higher Lows (HL) as the closing price is higher to that of the previous candle in an 'Uptrend'. Explained this whole scenario in the chart of NSE:MARUTI which showed a fresh and live demonstration of this discussed scenario in the last trading session that was on 1st September, 2023 (Friday) 📍 Well just to add a better confluence alongside PIVOT POINTS, here is the same chart with weekly pivots applied ↘︎ - This shows the entry of Weekly Initiative Players ( WH4 ) once the reversal structure gets confirmed ♠️ I hope your query has been answered to a satisfactory level and understanding from the basic to core 🥂 Let me know your view/suggestions in the comment section below 😊 Regards, Mukkull
NSE:MARUTI
by PivotMinati
9
The stock recently broke down from all critical support levels. The stock recently broke down from all critical support levels. The pullback seen during last two sessions can be corrective nature as the stock is closing into a strong resistance level. The RSI is facing resistance at a bear extreme zone. The stock is expected to resume trend down if it fails to move above 1610 levels. The downside targets are 1110, 960 & 920. However a move above 1610 may push the stock towards 1650 levels.
PShort
by BharatJhunjhunwala
While Nifty did made some attempt to pullback, the same was While Nifty did made some attempt to pullback, the same was absent on BankNifty. The movement on the index was weaker than that of nifty and a clear divergence was noticed. Disparity among these two index espically Banknifty lagging is not a sign of strength. While the RSI is into bearish zone below 20 the macd histogram is soaring red, indicating sellers are in no mood to stay back. Below 18650 the index may further slip to 13200 levels. However to prove itself strong the stock has to pull above 21900 the index may pull up to 24500 & 28000 levels.
NSE:BANKNIFTY
by BharatJhunjhunwala
1
Looking at the charts we can clearly say still there is no The index pulled back on Friday on probable stimulus hope by the government. Looking at the charts we can clearly say still there is no relief in selling. The RSI has fallen deep below 20 which indicates bears are in full force the MACD histogram is negative and trend still bearish. A single bullish day will never warrant a trend turn. 9300 level is immediate resistance while 9800 will be a major one, above which extended pullback may be witnessed towards 10900 levels. However a failure to survive at the resistance may push Nifty down to 7650 & 5500 levels! At this moment the targets may seem weird but the ways things are shaping up these may be realty soon.
NSE:NIFTY
by BharatJhunjhunwala
1
The USDINR is trending up, a small divergence was created on RSIIn our last analysis for USDINR, the set target was 74, which was met this week. The minimum target of the pattern has been attained. The pair surpassed its previous highs and retraced back. The USDINR is trending up, a small divergence was created on RSI after which a correction took place on Friday. 73.55 is short term support for the pair, if it manages to close itself above it then we may further see advance in it. The upside targets for the pair are placed at 74.70, 75.50 & 77.50 if the 73.55 levels is safe. Below 73.55 the correction may extend to 72.60, 71.30 & 70.75 levels.
by BharatJhunjhunwala
On weekly closing basis it saved a very critical support 9600 The 9800 targets set by us was attained this week. Nifty moved down sharply without sparing any stock on the street. On the weekly closing basis it saved a very critical support 9600 levels, which we consider as the last stand for bulls, below it the hell is open. The RSI was heavily oversold, on Thursday the reading of RSI was 13.05 this was the lowest reading for the last 20 years! So a pullback was not ruled out. The pullback on Friday after hitting the circuit wasn’t strong enough to pull up the averages. The strength pullback from current levels will decide the further course of the markets. 10470, 10720 & 11060 are probable resistance points, as Nifty reach them, the price action on these levels has to be studied to take any further action. On the downside 9600 is still the last support below which any estimation currently is not possible. Nifty is currently into sell on rise mode unless momentum proves otherwise.
NSE:NIFTY
by BharatJhunjhunwala
Though we have a bullish candle formation – piercing pattern on Similarly like Nifty the banking index also took support at the last extreme levels established by us at 22900 and bounced back. Individual banking stocks were battered down. Though we have a bullish candle formation – piercing pattern on the daily charts, the resistance weighs more. 25700, 26750 & 28250 are immediate resistance levels, price action needs to be studied when Bank nifty approaches these levels. On the downside if the index breaks 22900 then 20300 may provide minor support. Banknifty is also into sell on rise course as of now. The momentum indicators like RSI and MACD are not providing any cues.
NSE:BANKNIFTY
by BharatJhunjhunwala
While the stock markets gripped every attention, gold slipped While the stock markets gripped every attention, gold slipped quietly down after creating new 52 weeks high. Formidable selling was witnessed in Gold too this week. It closed below all the important short term trend lines. The RSI was displaying a divergence, which indicates a loss of momentum. Now trading just at minor support $1529 levels. Below this $1415 & $1300 levels may be seen. Pullbacks to $1600 – $1650 levels may be possible as the RSI is close to 35 levels, the strength of pullback will play an important role. If pullback halts close to $1600 - $1650 creating bearish price action, then another leg of down move may take place. Gold getting weak may be another trigger for stocks to gain strength, but these relations are too complex if analyzed on short term charts.
FX:XAUUSDShort
by BharatJhunjhunwala
RSI being heavily oversold the stock may pullbackThe stock 1101 during the day pulling back to close at 1134. Comparing close to close the stock corrected 1.43% compared to Bank Nifty overall. Now the stock is at a support. RSI being heavily oversold the stock may pullback from the current levels to 1160 – 1180 levels, however failing to cross them or creating bear candles at the levels may result into further selling. If selling beings again then the stock may find support at 1095, 1050 levels below which the target is deep towards 890 zones.
NSE:HDFCBANK
by BharatJhunjhunwala
The RSI is oversold on both the timeframes, so a bounce cannot Sellers took full control of the index. Nifty broke below a weekly trendline that was supporting the prices right from 2017. Selling was intense during the week. The daily RSI has moved to 26 levels while weekly RSI is close to 35 levels. The RSI is oversold on both the timeframes, so a bounce cannot be ruled out. The extent of the pullback will decide the further course. Nifty is expected to meet resistance at 11440 & 11740, shorts can be created at the levels considering the price action. On the downside nifty may drift to 10600 & 9800 levels in the weeks to come.
NSE:NIFTY
by BharatJhunjhunwala
Daily RSI has tripped below 25! The index has turned into The index corrected heavily this week making a low of 27162. Banknifty closed below an very important support level today, though an attempt to pullback was made but it didn’t succeed much. The RSI is into breaish zone & oversold too. Daily RSI has tripped below 25! The index has turned into “ sell on rise” candidate, pullbacks if any should be utilized to create short positions. Resistance is placed at 28570 & 28900 respectively, if selling takes place again then we may see banknifty falling to 26450, 24700 & finally 22910 levels in the weeks to come.
NSE:BANKNIFTYShort
by BharatJhunjhunwala
2
Today’s volume was peak with a small body candleThe stock has been falling since last few months after creating a top in November. During the last 5/6 sessions we notice a surge in volumes as well. Today’s volume was peak with a small body candle (now this create a anomaly between price and volume) we should expect large candles with large volumes but that has not been in this case, especially the last candle! Well these are signs of exhaustion of a trend. The stock fell only 2.64% in during today’s sell off! The RSI is into extremes OS region, these levels were noticed in July last year following to which the stock rallied hard! From an investing point of view positions can be created in the stock. From a trading point of view a move above 16700 may push the stock to 17300, 17600 & 18000 levels. Any failure to save the days low may push the stock down to 15000 zones.
NSE:EICHERMOTLong
by BharatJhunjhunwala
The RSI has fallen below the 30 levels. If Banknifty fails to If we compare percentage wise the fall in Banknifty was less intense than that of Nifty. Nifty corrected 3.71% while Banknifty (that should have been move wild) corrected 3.44% We can see that Bank nifty is also at an important pivot as Nifty is. The RSI has fallen below the 30 levels. If Banknifty fails to save the 28950 levels in the coming week then the selling may intensify and the index may correct further to 28450, 28260 & 28000 levels. For a strong pullback a close above 29350 is required, which may give a relief rally to 29900, 30100 & 30400 levels.
NSE:BANKNIFTY
by BharatJhunjhunwala
2
The fall halted at a very crucial pivot zone of 11200. The charts were providing clear signal of exhaustion in Nifty, the same I have been pointing out in my previous weekly issues. Sellers gripped Nifty very hard today and lead to a 431 point fall. The fall halted at a very crucial pivot zone of 11200. Now we have to watch out how Nifty will behaves on Monday. If it closes below the pivot and registers negative close then we have presume that a trend down have begun in the markets. The next major support level lies close to 9600! Well that’s a very distant probability target. To trade short term Nifty needs to close above 11300 for an advance to 11355, 11540 & 11600 levels. However if nifty fails to advance then we may further see corrections to 10900 levels. Some important observations on RSI is the oversold levels below 25! Last time RSI was below 25 August 2019 thereafter the corrections halted and a rally to new highs was seen.
NSE:NIFTYLong
by BharatJhunjhunwala
2
If nifty fails to move above 12300 then most probably it willNifty ended up in a state of confusion. There was no defined action, being the week ending on weekly expiry this was much expected. However Nifty seems to be under pressure. The 12300 levels are intact from last few weeks and has been acting as a effective resistance. If nifty fails to move above 12300 then most probably it will test 11990, 11850 & 11600 in the weeks to come, to get its bullish signature back Nifty needs to break above 12300. Above 12300 we may see Nifty move up to 12390 – 12650 levels.
NSE:NIFTY
by BharatJhunjhunwala